The video shows a Royal Marine shooting the man in the chest at close range with a 9mm pistol in Helmand Province in September 11, it is alleged by prosecutors.
The film, which had been recorded by a camera mounted on the helmet of another Marine, had been shown to a court martial in Bulford, Wiltshire last week.
Members of the media applied to the court for the release of the footage. The Service Prosecution Authority, which brings the case against Marines A, B and C, took a neutral position in response to the release of the clips.
In a written ruling, Judge Advocate General Judge Jeff Blackett rejected the media’s application.
He said: “In short, therefore, my view is the principle of open justice can be satisfied and has been satisfied by the DVD being played in open court where it has been observed by journalists and reported upon quite properly.
“Releasing it for unrestricted public consumption would expose British service personnel to increased risk of harm unnecessarily.”
Judge Blackett said that there was a “very high risk” that the footage would be used as propaganda by terrorist groups in “order to radicalise others and be exploited by terrorist organisations to incite individuals to carry out terrorist attacks”.
“It has been described in written reports and on television reports and there can be no suggestion that the prosecution case and the material upon which it relies are not crystal clear,” he said.
“Its release may be for proper journalistic purposes by those represented here but would also be used for sensationalist purposes by others and propaganda purposes by terrorist groups.
“More importantly its release will increase the threat of harm to British service personnel. I am not prepared to make an order which may lead to the injury or death of a single member of the British Armed Forces and in making this decision I have erred on the side of safety.”
During the hearing, Oliver Glasgow, for the MoD, submitted a document written by Paul Mott, from the Office of Security and Counter Terrorism in the Home Office, which gave an assessment of the “threat to life” should the footage of the alleged murder be released.
“I am confident that if made publicly available this footage would not only be used as propaganda material by terrorist organisations in order to radicalise others but would also be exploited by terrorist organisations to incite individuals to carry out terrorist acts,” said Mr Mott.
“Releasing it would therefore present a real threat to life for members of the Armed Forces and the wider British public and for British interests overseas.”
In response, Clare Kissin, for the media, said there was a “clear public interest” in the media being allowed to make public the footage.
“The trial proceedings are of clear public interest and reporting and commentary of it involves serious and important questions about the actions of service personnel in conflict zones,” she said.
“Accordingly, the starting point should be to grant access to the footage unless there are other rights and interests to be protected which amount to good reason not to.”
A spokesman for the Ministry of Defence said: “It is vital that justice is done and seen to be done, but Government also has a positive obligation to protect life.
“This video would undoubtedly be exploited by terrorists for propaganda purposes and, as the Judge Advocate General accepted, its release would pose a real and immediate threat to life for members of our Armed Forces.”
The court martial wcontinues today.