The Bush administration acted unlawfully in holding hundreds of deportation hearings in secret, solely on the grounds that those involved were terror suspects, a federal appeal court in Cincinnati ruled yesterday.

The hearings were "profoundly undemocratic", it said.

It is the most significant legal ruling on the government's conduct since September 11. The government is still deciding whether to appeal.

Hundreds of people were detained after the September 11 attacks, and all but 81 of the 752 held for suspected visa violations have now been deported or released, according to the latest justice department figures.

The deportation hearings were often held in secret. Even the fact that they were being held was concealed.

It was claimed that the secrecy was essential for national security.

"Democracies die behind closed doors," Judge Damon Keith wrote in his ruling.

"The first amendment, through a free press, protects the people's right to know that their government acts fairly, lawfully and accurately in deportation proceedings.

"When the government begins closing doors, it selectively controls information rightfully belonging to the people. Selective information is misinformation."

The ruling concluded that "open proceedings with a vigorous and scrutinizing press serve to ensure the durability of our democracy".

Judge Keith was appointed by President Jimmy Carter and has a reputation for taking a strong position on civil rights issues.

While the ruling criticizes the September 11 attacks as "egregious, deplorable and despicable", it describes the secrecy surrounding the government's response as "profoundly undemocratic".

The ruling, supported by all three judges, concluded: "The executive branch seeks to uproot people's lives outside the public eye and behind a closed door."

The case was brought by four newspapers in Michigan in connection with a Lebanese Muslim cleric, Rabih Haddad, who overstayed a tourist visa.

A resident of Ann Arbor, Michigan, Mr Haddad was the founder of the Global Relief Foundation, whose assets were seized during the post-September 11 investigation.

The foundation, which denies having terrorist links, is appealing against a court judgment upholding the seizure.

In April a judge in Detroit ruled that the government could not decide which of its hearings to keep secret. That ruling was taken to appeal. Yesterday's ruling upheld the trial judge's ruling.

Two other rulings, in Washington and Newark, have also ordered the government to make the hearings open to the press and public but the Cincinnati decision is the first at such a high legal level.

Mr Haddad, 41, was detained on December 14 in Brideview, Illinois, and an immigration judge in Detroit held three hearings into his case in secret, citing a directive from the senior immigration judge, Michael Creppy, that "the court must be closed for these cases - no visitors, no family and no press".

Mr Haddad, four newspapers and the Democratic congressman John Conyers Jr challenged the secret hearings.

The justice department argued that the executive branch had almost total power over immigration matters, and that this power was greater than the rights under the first amendment. The argument was rejected by the appeal court.

The judgment was welcomed by the American Civil Liberties Union, which has also challenged the government's decision to hold secret hearings and its failure to release the names and whereabouts of many of those detained. The Reporters Committee for Freedom of the Press also welcomed the decision.

The justice department said it disagreed with the judgment and would decide soon whether to appeal. It may wait for the decisions in the other pending secrecy cases.

"The justice department has an obligation to exercise all available options to disrupt and prevent terrorism within the bounds of the constitution and will review opinion in light of our duty to protect the American people," its statement said.

© Guardian Newspapers Limited 2002

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