The leader of the Al Quds Day march will not face prosecution for saying "Zionists" were "responsible for the murder of the people in Grenfell", after the campaign group that tried to put him in the dock lost a legal fight to do so.

The Campaign Against Antisemitism (CAA) sought to privately prosecute Nazim Ali for a speech he gave at the 2017 march in London where he said: "Some of the biggest corporations who are supporting the Conservative Party are Zionists. They are responsible for the murder of the people in Grenfell, in those towers in Grenfell. The Zionist supporters of the Tory Party."

He also said: "Careful, careful, careful, of those Rabbis who belong to the Board of Deputies, who've got blood on their hands, who agree with the killing of British soldiers. Do not allow them in your centres."

But the Crown Prosecution Service (CPS) intervened just a week before the case was due to go trial, saying it did not believe a prosecution would succeed and shut it down.

The CAA launched a legal challenge but on Wednesday the High Court upheld the CPS decision. 

In the judgment, it was revealed the CPS halted the prosecution because it did not believe anything Mr Ali said was "threatening, either explicitly or implicitly" and therefore a prosecution under Section 5 of the Public Order Act would likely fail.

The law forbids public behaviour that causes "harassment, alarm or distress" to those nearby.

The CPS also felt Mr Ali "qualified his statements by blaming the Grenfell tragedy on Tory Party policies" and "thus merely engaged in strident criticism of the Government", Lord Justice Hickinbottom noted.

The CAA argued this was irrational, saying Mr Ali's words meant that he believed Zionists had deliberately given money to the Tories to faciliate tragedies like Grenfell, where 72 people had died in a fire days before Mr Ali spoke.

But Lord Justice Hickinbottom said the Grenfell comments had to be "viewed in the context of the address as a whole" and no other part of Mr Ali's comments alleged "a deliberate and direct intention on the part of Zionists to murder people in high-rise blocks".

He said the CPS decision to stop the prosecution was reasonable "when that sentence is looked at in context".

He wrote: "Nothing in this judgment should be taken as condoning anything Mr Ali, or others at the rally whose words are recorded in the transcript, said.

"Clearly some things that were said were intemperate and deeply offensive and distressing to others, and not simply to those in whose direction they were aimed."

A CAA spokesman said: "Our judicial review did not succeed because the court decided that the decision to drop the case could not be characterised as irrational.

"That is hardly a ringing endorsement of the CPS’ conduct. We deeply regret that once more, hate speech on our streets has gone unpunished."