The 2003 Extradition Act was drawn up after the September 11 terrorist attacks to demonstrate the new climate of international co-operation in the War on Terror.

The law was intended to speed up the extradition of terror suspects between the United Kingdom and America. Crucially, the applicant no longer had to make a solid, prima facie case in an extradition hearing.

Instead, investigators could rely on a much lower standard of evidence including "hearsay" evidence ruled inadmissable by British criminal courts, to speed up the extradition process.

However, while Britiain swiftly passed the relevant legislation, the US did not. The Irish Republican lobby in Washington persuaded legislators that the treaty was a betrayal of the Declaration of Independence.

Professor Francis Boyle, an expert on international law based at the University of Illinois and a former board member of Amnesty International, told the Senate Foreign Relations Committee last year that the Act was "a British dagger pointed to the heart of Irish America."

The US has nonetheless wasted no time in taking advantage of the new one-way deal to pursue not only terrorists, but white collar criminals as well.

Authorities in the US have been under pressure to strengthen their activities against corporate crime following the collapse of Enron in 2001.

Of the 43 White House requests to extradite Britons so far, more than half have involved businessmen rather than terrorists. The trend has prompted lawyers and politicians to accuse America of judicial imperialism in its aggressive pursuit of white-collar offenders overseas.

The Enron 3 - whose allegedly fraudulent business dealings with the energy company were unearthed by accountants sifting through the aftermath of its collapse - are the most high profile targets of the legislation so far.

Their legal representatives have challenged the extradition on a number of levels, including abuse of process and human rights grounds.

The argument that they are British, that the charges relate to an English company and should therefore face prosecution only in England, was ruled "unduly simplistic".

Today's judgment, which is likely to be contested at the House of Lords, sets a high watermark to successfully challenge the legislation.

It is likely to influence the case of Ian Norris, the former chief executive of Morgan Crucible, who is wanted for extradition on charges of price-fixing. Mr Norris denies charges that he fixed prices of components used to power trains between 1989 to 2000.

City lawyers have argued that in an era of global business it is very easy to engage in a business transaction that impinges at some point on the US, without knowing it.

Human rights lawyers have said that the legislation had been "rushed through" and would "ride rough-shod over due process".

Martin Rackstraw of Bindman & Partners, said: "It is a fast-track tick-box regime which presents a risk to human rights. It is a draconian regime and it is flawed in many respects. It makes extradition to the US so much easier and takes away so many safeguards from the suspect. It is a piece of legislation which will have to be treated with a great deal of care."

Roger Best, litigation partner at Clifford Chance, said: "The sentences handed down in US commercial fraud cases are clearly a threat to those doing business with the US because the court rejected the argument that UK citizens should be prosecuted in England where the alleged criminal conduct occurred mainly in the UK.

"Wire fraud, an offence unknown to English law, is now a risk for those in the UK if it can be dressed up as a conspiracy to defraud and used as the basis of an extradition request."

The best advice to avoid such a fate probably comes from Amy Schulman, of DLA Piper, who says: "If you have any contact with American business, make sure you comply with American law. Just because you are not American and do not live in America, don't think that it doesn't apply to you."

Sir Digby Jones, Director General of the CBI, argued that the Government needed to "look again at how this treaty was working in practice".

He said: "Business is very supportive of white-collar crime being punished effectively but the treaty must be implemented fairly.

"It might be acceptable for the bloke who wraps Semtex around his body but not for a 62-year-old executive with prostate cancer. The process of justice is being abused. America is being an ignorant bully. This is just wrong."

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