Lord Justice Maurice Kay and Mr Justice Newman said "R18" sexually explicit recordings had to be sold in person in licensed sex shops.

They said the aim of the law was to stop the material falling into the hands of children.

It was argued at a recent hearing that the law harmed UK mail order firms and benefited overseas sex companies.

Forbidden material

Lord Justice Kay said: "We have no doubt that one of the main reasons for the restriction is to ensure that the customer comes face-to-face with the supplier so that there is an opportunity for the supplier to assess the age of the customer.

"It is a disincentive to a visibly under-age customer to seek out the forbidden material."

He said that it was no answer to say that the restrictions were unjustified because they could be circumvented.

"Whilst they do no make it impossible for a determined minor to come into possession of an R18 video, they make it more difficult," he added.

The judges were dismissing two appeals by licensed sex businesses fined thousands of pounds after prosecutions by Liverpool City Council's trading standards department.

Interfact Ltd, which has a sex shop in Bexley, and Pabo Ltd, based in Birmingham, were found guilty at Liverpool Magistrates' Court in April 2004 of offering R18 classified videos in their website catalogues.

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At the recent hearing which led to the judges' ruling, David Pannick QC, for Interfact, said it made "no sense" to allow sales to adults who were physically present, but prohibit mail order.

No human rights breach

"Indeed, the only purpose which such an interpretation of the law would serve would be to damage the local economy in favour of the economy in France or the Netherlands," he had told the hearing.

Mr Pannick had claimed prohibiting mail order would breach Article 10 - the right to freedom of expression - of the European Convention on Human Rights. But the judges rules there was no Article 10 breach.

Interfact was fined £3,000 for one offence of supplying and £2,000 for one offence of offering to supply. It was ordered to pay £25,617 prosecution costs.

Pabo Ltd was fined £2,500 in relation to one offence. It was ordered to pay £22,314 prosecution costs.