Campaigners had taken court action over the way grade boundaries were moved in GCSE English by the exam boards EdExcel and AQA between January and June last year.
The action was taken against the exam boards and the regulator Ofqual.
Following a three-day court hearing in December, Lord Justice Elias today ruled Ofqual had done the best it could with a qualification which was structured unfairly and, though the alliance was right to bring the case, grades would not be revised.
An education boss in Yorkshire said campaigners would take legal advice about whether to appeal.
The alliance accused the AQA and Edexcel exam boards of unfairly pushing up the grade boundaries for English last summer in what amounted to “illegitimate grade manipulation” and “a statistical fix” involving exams regulator Ofqual.
But two judges at London’s High Court today dismissed the challenge.
Lord Justice Elias, sitting with Mrs Justice Sharp, said Ofqual had appreciated there were features which had operated unfairly and proposed numerous changes for the future designed to ensure problems that had arisen would not be repeated.
The judge said: “However, having now reviewed the evidence in detail, I am satisfied that it was indeed the structure of the qualification itself which is the source of such unfairness as has been demonstrated in this case, and not any unlawful action by either Ofqual or the AOs (exam boards)”.
Leeds Council’s executive board member responsible for children’s services Coun Judith Blake said: “ “I am bitterly disappointed in this judgement. Thousands of young people’s futures have been badly affected by this and now it seems their plight has been ignored.”
Coun Blake, who played a leading role in mounting the national legal action said: “Although Lord Justice Elias acknowledged that we were right to raise the judicial review, we feel it is totally unreasonable to blame the modular system for these unfair results.
“Our legal challenge was thorough and showed clearly the unfairness of the exam boards’ decision to change the GCSE grade boundaries mid-year and the devastating impact this has had on thousands of young people across the country.
“It is, therefore, totally unsatisfactory that this has been ignored and the young people will not be granted the results they worked hard to achieve and would have achieved had their exams been graded, like many thousands of other students, earlier in the year or in the previous year.
“Many young people have already missed out on apprenticeships and college courses, and have been forced into making decisions about their education and future because of this mistake.
“We were only able to get to this stage because of the collaboration between students themselves and their families, head teachers, local authorities and professional bodies across the country who decided to stand up for the young people who have been treated so unfairly. So it is especially disappointing that the result is not what we had hoped for.
“We will now be seeking legal advice and discussing with the other members of the consortium whether we will appeal against this decision.”
Russell Hobby, general secretary of the National Association of Head Teachers (NAHT), said: “We are very disappointed with this decision.
“Grading decisions were unfair and an injustice was done to many thousands of pupils. While boundaries have not been restored, we hope this action will demonstrate to Ofqual and the exam boards that they should not act like this again.
“We are pleased the judge said we were right to bring the case, but nevertheless it is very sad not to be able to conclude the legal challenge with good news.
“As the judge acknowledged, the system was so flawed that the regulator had no choice but to be unfair to some group of students. Their choice was the lesser of two evils. The fact that a system cannot be managed without unfairness is a strong indictment. Let’s have an end to political meddling in exams from any part of the political spectrum, meddling which only sets up these failures.”
Christine Blower, general secretary of the National Union of Teachers (NUT), the largest teachers’ union, said: “This is a very disappointing outcome. It is very clear to the NUT and the other organisations who brought this action that a great injustice has been done.
“An estimated 10,000 students who took their English GCSE exam in June 2012 missed out on a C grade as a result of the decisions by the examination boards. These students had achieved exactly the same standard as their classmates who were awarded a C grade just a few months earlier.
“Parents, pupils and teachers will feel very let down.”
Malcolm Trobe, deputy general secretary of the Association of School and College Leaders (ASCL), said: “Naturally we’re very disappointed with the outcome. This is a lengthy judgment and we are currently considering it along with our fellow claimants and legal team. We still believe that thousands of young people had their exams unfairly downgraded last June in order to compensate for mistakes made earlier in the year.
“This was never about us, Ofqual or the awarding bodies. This is about the thousands of young people whose futures have been compromised by errors made by others.”