The People's Mujahideen Organisation of Iran, a resistance group, said it was a "magnificent victory for justice", after a six-year battle to annul the listing. But Britain's government said it was "disappointed" and it intended to appeal.
The group will stay on the proscribed list until the matter is resolved. The organisation is the armed wing of the France-based National Council of Resistance of Iran (NCRI), which says it renounced military activity in 2001.
Following the judgement, Maryam Rajavi, president-elect of the NCRI, called on the European Union (EU) to echo the appeal verdict and remove the group from its blacklist.
"We have always said and repeat again that the fundamental solution to the Iranian crisis is neither foreign military intervention nor appeasement," she said in a statement.
Britain's Proscribed Organisations Appeal Commission ruled there was "no evidence that the PMOI has at any time since 2003 sought to re-create any form of structure that was capable of carrying out or supporting terrorist acts".
Its 144-page final judgement document said there was no evidence of any attempt by the PMOI to "prepare" for terrorism or encourage others to commit acts of terrorism.
"Nor is there any material that affords any grounds for a belief that the PMOI was 'otherwise concerned in terrorism at the time of the decision in September 2006," it said.
Güncelleme Tarihi: 30 Kasım 2007, 18:11