The Court of Appeal has upheld a ruling that the wreck of an armed merchantman, sunk with the loss of 22 lives in 1943, should be regarded as a legitimate possibility for protection as a war grave.

The decision has cemented the position of the courts that the definition of a potential war grave should encompass not just military vessels and aircraft but also merchant vessels sunk with loss of life while active as part of a war effort.

In late 2005, the Secretary of State for Defence was challenged in the High Court for refusing to consider designation of the Storaa, a merchantman torpedoed off Hastings, under the Protection of Military Remains Act 1986.

The challenge was brought by Rosemary Fogg and Valerie Legard, daughters of a gunner who died on the ship. They were backed by the influential Merchant Navy Association, and by a Hastings-based maritime archaeologist, Dr Peter Marsden.

The judge agreed with the sisters that the Defence Secretary had misconstrued the Act, and instructed him to reconsider the Storaa protection application.

The MoD appealed but, with the latest ruling, has lost in its attempt to re-establish a more restricted definition of what may constitute a war grave.

The MoD is now likely to be concerned at the resource and cost implications of a possible swathe of merchant ship designation applications, which it would have to administer and police.

The Department of Transport may also be concerned because, over many years, it has sold off many hulls and cargoes for salvage with little concern for human remains.

And scuba divers, of course, will be worried over the potential threat to sport-diving freedoms.

However, Captain John Sail, Chairman of the Merchant Navy Association, stated earlier this year that, while the NMA had researched about 200 merchant wreck sites as possible candidates for protection applications, it would not embark on a crusade of such applications were the Storaa decision to be upheld.

Instead, said Captain Sail, the NMA would be steered by the reactions of its members - and the number of strong survivors' associations is small.

Meanwhile Fogg and Legard are expected to push ahead with their application for protection of the Storaa, either as a Protected Place (look but don't touch) or as a Controlled Zone (outright diving ban).