A European Court has ordered the European Union to remove Hamas from its terror list.

The Luxembourg-based court was ruling on a case filed by Hamas in 2010 which argued that its designation as a terror group had been based on information provided by the United States, while EU regulations require that the EU’s own material be used as the basis for such a classification.

However, the court said that Hamas’s assets will remain frozen, adding that the decision was based on technical grounds and did “not imply any substantive assessment of the question of the classification of Hamas as a terrorist group”.

An Israeli government spokesman said: "It’s clear that the European court has ruled on procedural issues... The court stressed that it has not ruled on the substantive issues, and has in fact suspended implementation of its ruling in order to allow for these to be addressed."

However, in a statement, Israeli Prime Minister Benjamin Netanyahu rejected the court's explanation, saying: "We expect the EU to return Hamas to the terror list, where anyone can see that it belongs. Hamas is a murderous terror group whose charter clearly states its goal of destroying Israel."

Hamas’s military wing was added to the EU’s terrorism blacklist created in December 2001 in the wake of the September 11 attacks on the US. The EU blacklisted the political wing of Hamas in 2003.