Government hopes of deporting dozens of terror suspects to their home countries suffered a serious setback today with the European court of human rights ruling against one such attempt.

The grand chamber of 17 judges at the Strasbourg court found unanimously that an attempt by Italy to send a man back to Tunisia violated the ban on torture or inhuman or degrading treatment in the European convention on human rights.

The case was brought by Nassim Saadi against the Italian government. The British government intervened in the hope the court would sanction the return of suspects regardless of their home country's human rights record.

Ministers argued the right of the public to be protected against terrorism should be balanced against a suspect's rights not to be ill-treated.

The court ruled that protection against torture is absolute and Saadi cannot be sent back, even though he has been convicted of terror-related offences in both Tunisia and Italy.

"This decision will be welcomed by anti-torture and human rights campaigners everywhere," said Sonya Sceats, an associate fellow at the international thinktank Chatham House.

"By affirming the absolute nature of the torture ban, the Strasbourg court has proved that basic rules of international human rights law cannot be sacrificed in the name of counter-terrorism."

But she said it would be "naive" to think the court's decision would stop the UK trying to deport people to countries with dire human rights records. "Instead we are likely to see increased reliance on diplomatic assurances as a way of diminishing the torture risk…These efforts by the UK to water down the torture ban have disappointed many.

"Once considered a leader in the field of human rights, the UK is now seen by some as an innovator of bad practice, as controversies over diplomatic assurances and recent admissions about CIA rendition flights demonstrate."

The judgment, from which there is no appeal, binds all the countries of the Council of Europe, including Britain. It throws into question Britain's terror deportation programme, which relies on diplomatic assurances and memoranda of understanding with Tunisia and other countries.

A Home Office spokeswoman said nine people had been deported in the last two years based on assurances they would not be badly treated, but she would not say which countries were involved.

"We intervened in this case because terrorism undermines fundamental human rights including the right to life. We're disappointed at the ruling by the European court and we will consider the judgment," she said.