The UK government may have to surrender its controlling stake in BAA, the privatised company that runs Britain's major airports.

In a ruling released on Tuesday the European Court of Justice ruled that such "golden" shares were illegal.

A similar ruling was passed down on Spain's energy, telecoms, banking, tobacco and electricity networks.

The court claimed that as governments with golden shares had the power of veto over who can buy a stake in the companies, there was a breach of EU laws on the "free movement of capital".

A spokesman for the UK's transport department said the government would be "considering the ruling very carefully".

Court officials said the government would either have to surrender the shares altogether or alter the conditions that lend the golden share special authority to block stock-trading and takeovers.

In the case of BAA the government can intervene to block any purchase of more than 15 per cent of the company's shares.

Official in London are set to give careful scrutiny to the ruling as Britain has similar stakes in a number of other key privatised services.

Tuesday's ruling marks a second major victory for the European Commission in its ongoing battle against government strangleholds on otherwise private holdings.

Last year the court backed Commission appeals to strip the French government of its golden share in Elf Aquitane, now Total Fina.

Cases against similar share deals are pending against the Netherlands, Denmark, Italy and Spain, while a controversial Brussels complaint against Berlin's influence over Volkswagen is in its early stages.