LONDON -- A U.K. court Friday ordered the U.K.'s home secretary to lift a six-year ban on Iran's Peoples Mujahedeen Organization of Iran, which is part of a broader coalition group that forms the main opposition to the current regime in Tehran.

The PMOI, which last October appealed to the U.K.'s Proscribed Organization Appeal Commission to be taken off the list of proscribed organizations, campaigns for regime change in Tehran and a secular democracy based on respect for human rights.

"The PMOI has conducted no military activity of any kind since about August 2001, whether in Iran or elsewhere in the world," the appeal commission said.

"The court orders the Home Secretary to deproscribe the PMOI," as a terrorist organization, said High Court Judge Harry Ognall who was delivering the commission's decision.

The U.K. Home Office has said it would appeal the decision and the PMOI would remain a proscribed organization during the government's appeal.

However, it's still an important victory for the Iranian opposition, which is currently fighting a similar ban on the PMOI in the U.S. and the European Union.

If upheld, the U.K. court's decision will allow the Iranian opposition group to redirect its financial resources and step up its political work inside Iran where they have been fighting for regime change for decades, said Hossein Abedini, foreign affairs committee member of the National Council of Resistance - the PMOI's political arm.

"This will have a great impact on the situation inside Iran as we are the main opposition inside the country," Abedini told Dow Jones Newswires.

"Now we can use our resources to fight for peaceful, democratic change inside Iran instead of spending it on court appeals," he said.

Lord Robin Corbett, who was one of the main appellants against the ban said the decision was a long time coming.

"This ban of the Iranian opposition was never justified. It's taken a long time to get it lifted but we've been through the appeal process and feel vindicated," Corbett told a jubilant crowd of supporters of the Iranian opposition on the steps outside the appeals commission in London.

Maryam Rajavi, President of the National Council Of Resistance Of Iran, praised the decision and called on the E.U. to follow the U.K.'s example.

"This ruling is a great victory and will send a message of firmness to the religious dictatorship ruling Iran," Rajavi told a news conference in a video link from Paris.

The Paris-based PMOI is the largest member of the NCRI, the Iranian parliament in exile.

Abedini said Friday's decision would help in the group's efforts to lift similar bans in the U.S. and the E.U.

"The judgment here will have an impact on what is happening in the U.S. where we have lots of support in the Senate for our cause," he said.

Last year, the PMOI successfully challenged an E.U. decision to freeze its assets. But the group was unsuccessful in removing its name from the E.U.'s list of terrorist groups, despite a ruling from the European Court of First Instance annulling the freezing of its assets.

In 2004, the group failed in a similar effort to have itself removed from the U.S. State Department's list of foreign terrorist organizations.

But David Vaughn, PMOI's lawyer for the European hearings, said the next hearing by the European Court of First Instance in Luxembourg in February was likely to be influenced by the U.K. decision.

"The findings of fact about the non-involvement of the PMOI (in terrorism) will make it almost impossible for them to keep the PMOI on the list," Vaughn said.

He said he thought the U.K. Home Office appeal against Friday's decision would likely fail.

"I don't think the U.K. government appeal against this decision will get leave from the courts to proceed, and if it does, I don't think they can change the original decision," Vaughn added.

While officially banned in most Western countries, the PMOI's standing is complicated by the looming confrontation between the U.S. and Iran over Tehran's nuclear program.

Friday, the E.U.'s foreign policy chief and Iran's top nuclear negotiator held last-ditch talks on Tehran's nuclear program, but hopes of a breakthrough appeared slim amid a growing threat of new U.N. sanctions.

The NCRI, although it hasn't always provided accurate information, has still emerged as a key source of intelligence for Washington on Iran's nuclear program and paramilitary operations. In August 2002, the group's information was proven correct when it said Tehran was pursuing a secret nuclear program.

It also has strong support in the U.S. Congress, where some sympathetic lawmakers view it as a potential democratic counterweight to the current regime of President Mahmoud Ahmadinejad that is at loggerheads with the U.S. over its nuclear program.

The PMOI also has a lot of support in Europe, where it is backed by many European parliamentarians. In the U.K., several key lawmakers and peers, including former Home Secretary David Waddington, backed the appeal against its terrorist status.

Originally a Marxist-Islamist group, the PMOI was set up in 1965 to oppose the U.S.-backed regime of the late Shah Mohammad Reza Pahlavi. It participated in the country's Islamic Revolution but soon fell out with the clerical government and launched a campaign of assassinations and bombings in an attempt to topple it.

The PMOI moved to Iraq in the early 1980s where it fought Iran's Islamic rulers until the U.S. invaded in 2003. U.S. troops in Iraq have since disarmed thousands of the group's members and confined them to a camp near Baghdad.

Despite occasional run-ins with the law, supporters of the PMOI continue to operate openly in Europe, where they regularly organize protests, rallies and press conferences denouncing the government in Tehran.