The UK government invoked section 35 of the Scotland Act in January to prevent the Gender Recognition Reform (Scotland) Bill receiving royal assent after it was approved by MSPs in an 83-39 vote.

Section 35 allows the UK government to intervene if, for instance, a bill contains provisions “which make modifications of the law as it applies to reserved matters and which the Secretary of State has reasonable grounds to believe would have an adverse effect on the operation of the law as it applies to reserved matters”.

The Scottish government challenged the legal basis for the use of section 35, which had never been invoked before nor tested in court.

The lord advocate argued on behalf of the Scottish government that because the Scottish bill does not amend section 9 of the Gender Recognition Act 2004, which sets out the effect of obtaining a gender recognition certificate, there was no modification of the law as it affects reserved matters.

However, in a 65-page ruling handed down at noon today, Lady Haldane said: “Since the whole purpose behind the bill is to widen the category of those who may apply, and to simplify the overall process by which a certificate may be obtained, it cannot be asserted that the meaning overall of section 9 has not changed, looked at objectively.”

She continued: “The words ‘full gender recognition certificate’ will no longer mean the same thing as they do currently, and focussing on the lack of amendment to the language of section 9 itself is to ignore the significance of a proposed amendment to the underlying meaning of a key component of that section.”

Lady Haldane held that section 35 was therefore engaged, and rejected separate arguments that the UK government should have used a different mechanism to secure amendments to the bill.

In a statement, Scottish secretary Alister Jack said: “I welcome the court’s judgment, which upholds my decision to prevent the Scottish government’s gender recognition legislation from becoming law.

“I was clear that this legislation would have had adverse effects on the operation of the law as it applies to reserved matters, including on important Great Britain-wide equality protections.

“Following this latest court defeat for the Scottish government, their ministers need to stop wasting taxpayers’ money pursuing needless legal action and focus on the real issues which matter to people in Scotland – such as growing the economy and cutting waiting lists.”

The Scottish government has not yet issued a formal response nor indicated whether it will appeal, in which case the matter is likely to go all the way to the UK Supreme Court.