Judges say an injunction barring The Sun on Sunday from naming a celebrity said to have engaged in "extramarital activities" can be lifted – but they have not named the man involved, who is now expected to ask for a stay pending further legal action.
Editors of the newspaper wanted to publish an account of the man's ''sexual exploits'' with others.
The man took legal action and earlier this year two Court of Appeal judges imposed an injunction preventing the newspaper from identifying the man.
Three appeal court judges have now said the injunction can be lifted following a challenge by lawyers for the newspaper.
But they did not name the man in their ruling pending further legal action by his lawyers.
Lawyers for the celebrity – PJS – are asking appeal judges to give them permission to take the case to the Supreme Court.
And the appeal judges said the celebrity cannot be identified until they have ruled on whether the case should go to the highest court in the UK.
Appeal judges Lord Justice Jackson, Lady Justice King and Lord Justice Simon analysed News Group Newspapers' challenge on Friday.
Lord Justice Jackson announced their decision on Monday.
Sun on Sunday editors argued that the ban should go because the man – a showbusiness celebrity and public figure – has been named in articles abroad and his identity could be found on the internet.
The man opposed the application and said the ban should stay in place.
Lord Justice Jackson said appeal judges had concluded that "knowledge of relevant matters" was "now so widespread" that confidentiality had "probably been lost".
"Much of the harm which the injunction was intended to prevent has already occurred," said Lord Justice Jackson in Monday's ruling.
"The court should not make orders which are ineffective."
Lawyers for the man told the appeal court judges that he wanted the Supreme Court to analyse the case.
And the appeal judges said the man's lawyers should have time to state their case to the Supreme Court.
Appeal judges said their decision to lift the injunction would be stayed until 1pm on Wednesday to give the man's lawyers time to prepare a Supreme Court application.
Both the Court of Appeal and the Supreme Court can give permission for a Supreme Court challenge to be mounted.
The three appeal judges refused permission for the man to appeal to the Supreme Court.
Lord Justice Jackson said: "We consider this is a matter for the Supreme Court to decide."
He announced: "We grant a stay until 1pm on Wednesday. The effect of that stay is that the injunction will remain in place until then."
The judge said "the claimant ought, in our view" to be able to lodge his application for permission to appeal to the Supreme Court by 10am on Tuesday.
Read the Court of Appeal ruling in full.
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