The judicial review ruling by Justice Moses signals the end of a six year legal battle with the government, during which time the right to claim the money has swung between both sides.
Justice Moses backed environment secretary John Prescott's decision that Camden is not entitled to the millions it claimed it lost when changes to housing accounting systems were changed in 1990.
Justice Moses advised the council against appealing and said: 'This matter has taken up enough time in the courts. No matter how you dress up the issues there are no new arguments.'
Eight other local authorities backed Camden's case and have pledged to contribute to legal costs, which could run to£30,000.