Alarmed residents have lost their High Court battle to prevent surface-to-air missiles being stationed on the roof of a 17-storey residential tower block during the Olympics.
A judge ruled today residents at the Fred Wigg Tower in Leytonstone, east London, did not have an arguable case.
The tenants fear the missile base above their heads could make them the focus for a terrorist attack.
The Ministry of Defence (MoD), security service and police say there is "no credible threat" and the siting of the missiles is both "legitimate and proportionate".
The block is one of six sites in the capital where missiles, including rapier and high-velocity systems, will be deployed to protect Games venues.
The Fred Wigg residents applied for permission to seek judicial review, protesting there has been a "disproportionate interference" with their human rights, and they were not consulted fairly and properly over the siting of the ground-based air defence system.
Their lawyers argued during a one-day hearing yesterday that those who wanted to move out should at least be relocated in hotels by the MoD for the duration of the Games, or a gantry should be erected away from the block to take the missile system.
But on Tuesday their legal challenge was rejected by Mr Justice Haddon-Cave, sitting at London's High Court, who said: "The law and the facts militate against the claim for judicial review.
"In my judgment the MoD's voluntary engagement with the community and residents in this matter were immaculate".
The judge said residents had expressed "shock, anxiety and worry" over the prospect of missiles being stationed at the tower.
But they had been under "something of a misapprehension" about the nature of the equipment to be deployed and the risks deployment would bring.
On Monday Marc Willers, representing the residents, told the court: "It is the unprecedented siting of a military base or missile site in peace time on English soil that brings us to this court."
He said of the residents: "They have a fully justified fear that installation or deployment of the missile system on the roof of the Fred Wigg Tower gives rise to the additional risk that the tower itself may become the focus of a terrorist attack."
The fear was not just genuine but justified "given the nature of the forthcoming occasion - the Olympic Games - and given the nature of the deployment and the current threat level, which is said to be 'substantial'".
Mr Willers accused the Defence Secretary of breaching Article 8 and Article 1 of Protocol 1 of the European Convention on Human Rights, which protect an individual's right to private and family life and the peaceful enjoyment of their home.
He also argued the MoD failed to conduct a proper equality impact assessment (EIA), taking into account the needs of disabled residents.
David Forsdick, representing Defence Secretary Philip Hammond, said top Ministry of Defence officials, UK intelligence agencies and the Metropolitan Police had all rejected the possibility of an attack on the Fred Wigg block.
He said Dr Campbell McCafferty, head of UK counter-terrorism at the MoD, and General Sir Nick Parker, who has overall responsibility for national security in respect of liaison with civil authorities, had both stated "in no uncertain terms" there was no credible threat.
Mr Forsdick argued Mr Hammond was under no statutory duty to consult, although an impact assessment had been carried out and residents' human rights taken into consideration.
But residents had no legitimate expectation that they would be consulted on issues involving the defence of the realm and national security.
The decision over where to position the missiles was taken at the "highest levels after rigorous scrutiny" and signed off by the prime minister, deputy prime minister, home secretary and defence secretary.
Mr Hammond was "the master of procedures" and entitled to conclude there was no alternative to the use of the Fred Wigg Tower.
Defence of the realm was a "legitimate and proportionate" aim, and the MoD was not legally obliged to relocate residents or offer them compensation.
Mr Willers accused the MoD of "displaying an element of contempt for the concerns and views of the residents".
He said an assault might not be aimed at all the missile sites being set to protect the Games but there might be an attack on the block that was no more than a bid "to make an evil statement - but a statement nevertheless".
The Defence Secretary has described the ground-based air defence systems as "just one part of a comprehensive, multi-layered air security plan" which would provide "both reassurance and a powerful deterrent" during the Games.
The security plan includes a helicopter carrier, HMS Ocean, being moored in the River Thames, with RAF Typhoon jets stationed ready at RAF Northolt and Puma helicopters at a Territorial Army centre in Ilford.
The other sites chosen to guard against any Olympic air threat are the Lexington Building in Tower Hamlets, east London; Blackheath Common and Oxleas Wood, both in south-east London; William Girling Reservoir in the Lea Valley reservoir chain in Enfield; and Barn Hill at Netherhouse Farm in Epping Forest.