LONDON, March 19 (Reuters) - British newspaper The Guardian lost a high court challenge to lift a gagging order preventing it publishing documents about alleged tax avoidance schemes by Barclays Plc, both sides said on Thursday.
The Guardian had early on Tuesday published a sheaf of internal memos from Barclays' structured finance department, but withdrew them after lawyers for the bank obtained an emergency temporary injunction from a judge to have them removed.
Justice Blake said on Thursday the ban would remain in place because The Guardian was not entitled under the Human Rights Act to publish the complete documents containing legal advice and other confidential matters, the newspaper said.
Blake said he would maintain the ban on the Guardian publishing the documents, supplying them to others, or inciting their publication elsewhere, the newspaper said, even though the subject of the way banks behave was important and topical.
"We could not be passive following the theft of these commercially sensitive documents and took this course of action to argue an important principle that both client confidential and privileged material that is Barclays' property should be protected," Barclays said in a statement.
Barclays said in court the documents had been stolen by a disaffected ex-employee, and said further publication would damage its business.
The documents were used in a story alleging the bank used complex schemes to avoid paying tax in Britain.
Barclays said it did not encourage or condone tax evasion and complies with taxation laws in the UK and the other countries in which it operates. (Reporting by Steve Slater and Olesya Dmitracova)