England's leading football clubs were yesterday given the go-ahead to continue negotiating a collective agreement for the televising of their matches when a court ruled that their exclusive deal with BSkyB was not illegal.

The decision by the restrictive practices court caused embarrassment to Britain's Office of Fair Trading (OFT), which brought the case at a huge cost against the Premier League, BSkyB and the BBC after claiming that fans were being cheated because of the small number of live games on terrestrial television.

The OFT claimed that the 20 Premier League clubs operated an unlawful, anti-competitive cartel by negotiating as one block rather than giving clubs the individual right to negotiate their own television deals. Had the OFT won, meaning clubs could negotiate individually, it would have been good news for bigger teams which can attract large television audiences, but disastrous for some of the Premier League's smaller clubs.

Under the current Stg£743m deal only 60 Premier League games are screened live each season, on BSkyB with highlights on BBC. Half the money is divided equally among the Premier League clubs.

Mr Justice Ferris said that while the court conceded there was a restriction on the number of matches that could be broadcast, the system was in the public interest and was therefore not illegal.

If the system changed, many smaller clubs would lose out on revenue while the ability of the Premier League to achieve an "equitable division" of television revenue between its member clubs, thus maintaining a competitive balance, would be "lost or seriously diminished". Competition between broadcasters would also be impeded because it depended on them being granted exclusive rights.

Overall, claimed Mr Justice Ferris, the current restrictions are not unreasonable.

The dismissal of an OFT case for the first time in its history led to criticisms of the organisation and the decision to bring the case to court. The case is believed to have cost around Stg£30m.

John Bridgeman, the OFT director general, said after the case: "I'm afraid that justice does not come cheap. That's what it's taken to have a fair hearing but this is a multi-million pound industry that's growing quickly and we needed to look very closely at this whole issue.

"It's been a very good case to bring before this court because an issue like this can only be examined by a court. Many of the aspects of the judgment are quite surprising, we will need to study it in some detail." The deal between BSkyB and BBC is set to expire in two years' time and negotiations for a new contract are expected to begin next year.

Premier League spokesman Mike Lee refused to speculate on the next deal, which could contain a mixture of games broadcast under a collective agreement, leaving clubs to negotiate some games independently.

The case is thought to have cost the league around Stg£8m. "We could have invested this money into football. The Premier League will start negotiations (for the next television deal) in 12 months' time and we don't know what the shape of that deal will be. We are delighted with the ruling. It is a great victory for the whole of English football."