Marks and Spencer has won a landmark case giving the retailer the right to offset foreign losses against its UK profits.

The European Court of Justice in Luxembourg yesterday ruled that M&S could claim back tax worth approximately £30m on losses of £100m sustained in France, Belgium and Germany in the late 1990s.

However, the court stopped short of allowing further companies to launch similar claims by ruling that a parent company could only adopt losses when it had “exhausted all possibilities” of offsetting them in the subsidiary’s country.

A similar class-action case involving 75 UK companies, including Asda, is waiting to be heard, while Cadbury Schweppes has started a case claiming that UK tax law illegally restricts it from setting up operations abroad.

Mark Persoff, a senior tax lawyer at Clifford Chance said: “The judgement is a balance between protecting the single market and protecting national tax systems. It is helpful in most of the cases against the Treasury and will not be a cash payout day for the taxpayers.”

A spokesman for the Treasury added: “We accept that in a very small number of very limited circumstances, the UK may have to allow relief.”