Police inappropriately obtained search warrants to raid the homes of two Northern Irish investigative journalists, a court has concluded, in a case that has raised concerns about press freedom in the UK.

Trevor Birney and Barry McCaffrey highlighted apparent collusion between the police and suspected murderers in the 1994 Loughinisland massacre, where six Catholic men were killed by masked Ulster Volunteer Force killers.

No one has ever been charged with the murders but the journalists were arrested in dawn raids at their homes last August on suspicion of theft after obtaining an unredacted police ombudsman investigation into the massacre, as part of their work on the documentary No Stone Unturned. Millions of pages of documents were also seized during the raid, while the pair have remained on bail for nine months without charge.

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The journalists challenged the legality of the search warrants used to access their homes and offices, and on Wednesday Northern Ireland’s lord chief justice Sir Declan Morgan concluded that the court is “minded to quash the warrants on the basis they were inappropriate”.

However, this does not guarantee that seized material will be returned or that the case against the journalists will be dropped, with a further hearing expected on Friday.

Birney told the Guardian that it is now time for the police to “stop digging” following nine months of “absolute madness” and accept their legal case is doomed and would only cause more embarrassment for the authorities.

“After the film was released the police had a choice to go after the killers or the journalists,” he said. “The police decided to deploy their resources and go after the journalists. It’s still shocking how police are essentially truth deniers. There are many people within the upper echelons of the police service in Northern Ireland who are still denying the truth that police colluded with the killers of six men in Loughinisland.”

The case has become a cause célèbre among press freedom campaigners, who have drawn comparisons with the UK government’s attempts to encourage journalistic freedoms overseas. Index on Censorship editor Rachael Jolley said the police’s activities were “likely to have the effect of intimidating journalists throughout Northern Ireland and further afield”.

The raids against the men were overseen by officers from Durham constabulary, after being asked to take over the case by the Police Service of Northern Ireland due to a potential conflict of interest.

“The police lost their moral compass and lost all sense of the fact that six men died here and their families have been denied justice for that,” said Birney. “If they have any sense today they will see there is no point spending public money going after journalists in this way.”