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In their hearing before the Court of Appeal, lawyers for the men said that the law had been designed to catch people holding plans for bombs rather than propaganda. None of the men possessed information that suggested they were plotting a bomb attack, although there had been talk of heading to Pakistan for paramilitary training.

The prosecution had relied on a "maverick use" of the law which had never been intended by Parliament, the appeal lawyers said.

Joel Bennathan, QC, for Mr Zafar, told the Court of Appeal: "The evidence at trial was that he made no attempt to conceal his very large collection of pro-jihadi sermons and lectures. His computer had no password, nor was any significant material encrypted or deleted."

All five were present in court for today's ruling.

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This is a major setback for the police

Sean O'Neill, Crime editor

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Allowing their appeals, Lord Phillips, sitting with Mr Justice Owen and Mr Justice Bean in London, said: “Difficult questions of interpretation have been raised in this case by the attempt by the prosecution to use section 57 for a purpose for which it was not intended . . .

“We have concluded that, if section 57 is to have the certainty of meaning that the law requires, it must be interpreted in a way that requires a direct connection between the object possessed and the act of terrorism."

He added: “We do not consider that it was made plain to the jury, whether by the prosecution or by the Recorder, that the case that the appellants had to face was that they possessed the extremist material for use in the future to incite the commission of terrorist acts.

“We doubt whether the evidence supported such a case.”

The Crown is considering whether to appeal to the House of Lords as the case raises matters of public importance, the court was told. Prosecutors are not seeking a retrial.

Mr Malik’s solicitor, Saghir Hussein, said later: “This is a landmark judgment in a test case over the innocent possession of materials, including books and speech.

“It was very difficult in the current climate for any jury to decide on anything apart from conviction. However, a more detached and informed court has recognised the draconian nature of Sections 57/58. This will have implications for other cases, such as those alleging the glorification of terrorism.”

Imran Khan, solicitor for Mr Zafar, said that his client was "over the moon" at the ruling. Young Muslims seeking to explore the world of their religion should no longer be victimised, he said.

He said that the Government should look carefully at the judgment and reconsider the current legislation. “This is a good judgment for the Muslim community and the community at large,” he said.

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