Five new Labour members who took the party to court over their right to vote in the leadership election will not take their fight to the supreme court after losing the case in the court of appeal.

Labour’s national executive committee (NEC) ruled in July that only members with six months’ continuous membership could vote in the contest between Jeremy Corbyn and Owen Smith.

A crowdfunded legal case was brought against Labour by Christine Evangelou, the Rev Edward Leir, Hannah Fordham, Chris Granger and FM, a teenage member, in an attempt to argue that the ruling was a breach of their contract with the party.

Although the high court ruled in favour of the members, Labour brought the case to the court of appeal, which overturned the decision and ruled that the NEC “has the power to set the criteria for members to be eligible to vote in the leadership election in the way that it did”.

Court of appeal judges also ordered the five to pay legal costs and refused the right to appeal to the supreme court, meaning that they would have to ask the supreme court if it would hear the case. The decision means that about 130,000 members who joined less than six months ago will not be able to vote in the election.

More than £93,000 had been raised on the members’ crowdfunding website, but Fordham wrote on Sunday that they had decided not to appeal directly to the UK’s highest court, citing the costs involved.

“This has been an odd, emotional rollercoaster of a week for us all,” she wrote. “Unfortunately, given the costs involved in pursuing the case further (the fee for getting the case even heard at the supreme court is around £8,000), we have taken the decision that this is where this particular legal case has to stop.”

The fee for an application for permission to appeal to the Supreme Court is £1,000.

Fordham said the case “wasn’t in vain, although we didn’t succeed in reclaiming votes for the 130,000 disenfranchised members, we did win in the high court, exposing facts which have spurred important conversations about the role of the Labour party membership and the NEC.”

She said the costs the group had been ordered to pay, which came to about £80,000, plus their legal fees, would be covered if the crowdfund reached its £100,000 target.

“The fight for justice isn’t over yet, although this particular stage of it is over,” she said. “The five of us are going to stay in the party and work to try and change things for the better within the party’s structure itself.”

Corbyn’s team, which had vocally supported the legal challenge and criticised the court of appeal judges, said the cash raised showed “the strength of solidarity shown to the five claimants campaigning for the democratic rights of their fellow Labour party members has been truly remarkable”.

“It is clear that there exists huge amount of support for Jeremy’s vision of a democratic Labour party that is open and inclusive for all, so that we can achieve a Labour government that can transform and rebuild Britain, so that nowhere and no one is left behind,” a campaign spokesman said.

After the court decision on Friday, Corbyn’s team described the decision as wrong “both legally and democratically”.