A federal appeals court rejected the argument by Mr Silverstein's lawyers that, under New York law, the two aircraft that hijackers flew into the Twin Towers amounted to two separate attacks.

The court upheld a decision by a lower court that a jury should decide whether the attacks were two separate events.

If this was the case, Mr Silverstein would get $7bn (�4.3bn) instead of the $3.5bn which his insurers - led by Swiss Re and Travellers Property Casualty Corp - say he is due for what they believe constitutes a single attack.

"This is a total win for insurers," Swiss Re lawyer Barry Ostrager said.

"All of the positions sponsored by Silverstein have been rejected."

But Howard Rubenstein, a spokesman for Mr Silverstein, said it was too soon for the insurers to be claiming victory.

"While we had hoped that the Second Circuit would rule that the events of September 11 constituted two occurrences as a matter of law, we are fully confident that a jury hearing all of the evidence will reject the insurers' attempts to avoid paying for the cost of rebuilding the World Trade Center," Mr Rubenstein said.