Government evidence in a rendition case will be heard in secret for the first time following a high court ruling.

Lawyers for the Ministry of Defence and the Foreign Office in a case brought by two Pakistani men will be allowed to present evidence behind closed doors under rarely used provisions of the Justice and Security Act.

The two men, Amanatullah Ali and Yunus Rahmatullah, claim they were subjected to torture and rendition.

Mr Justice Leggatt’s decision is believed to be the first time that the courts have agreed to sanction a “closed material procedure” in such a case in British courts. It means Ali and Rahmatullah, their lawyers, journalists and members of the public will have to leave the courtroom when the government’s “sensitive” evidence against the two men is presented.

The judge acknowledged such secret hearings represented a “serious derogation from the fundamental principles of open justice and natural justice”, but that disclosing the evidence could reveal the extent of British intelligence on suspected terrorists and would be damaging to national security.

British forces detained Ali and Rahmatullah in Iraq in February 2004 and then handed them over to US forces. By the following month, they had been transported to Bagram airbase in Afghanistan, where they were held for the next 10 years.

The men allege they were unlawfully detained , mistreated at the time of their arrest and then subject to torture by their US captors.

The Ministry of Defence maintains that Ali and Rahmatullah were arrested because they were assessed to be members of Lashkar-e-Taiba, a terrorist group with links to al-Qaida. Both men deny that they were connected to any terrorist group.

The human rights organisation Reprieve, which is assisting the men, says that Ali, a rice trader, was detained on the basis of flawed intelligence that wrongly identified him as a Lashkar-e-Taiba commander.

Omran Belhadi, a lawyer at Reprieve who is assisting the men, said: “This is a dark day for British justice. The government is insisting on secret hearings – concealed even from the victims – to continue covering up its error.

“It is a blatant attempt to bury the embarrassing truth about the UK’s role in renditions. With the new US president vocally supporting torture, it’s more important than ever that we learn from the mistakes of the past – and never repeat them. The government should urgently withdraw its bid for secrecy.”

The coalition government originally introduced closed material procedures under the 2013 Justice and Security Act after the court of appeal rejected requests by MI5 and MI6 that they be able to present security evidence about Guantánamo Bay detainees without disclosing it in full to the claimants.

In his ruling on Rahmatullah, Leggatt said: “Much of the material is undoubtedly sensitive. Disclosing it could reveal, amongst other things, the extent of the UK’s information about suspected terrorists and how that information was obtained.

“I accept that, notwithstanding the passage of time since the events occurred, revealing such information would be damaging to national security. I am also satisfied that, because of the potential significance of the material as evidence, Mr Rahmatullah’s claim cannot properly be tried unless the defendants are able to rely on this sensitive material in support of their case as to the reasons for his presence in Iraq and the reasons for his arrest, and unless there is an opportunity for a special advocate representing Mr Rahmatullah’s interests to challenge and test the reliability of the material and the inferences which the defendants seek to draw from it.”

A special advocate is a barrister appointed by the court to represent the interests of the claimant in closed material proceedings. They cannot communicate with the claimant’s lawyers.

In relation to Ali, he said: “It is apparent from this example and other observations … that Mr Ali maintains that his arrest was based on false intelligence and involved a mistake as to his identity. This, in my view, makes it all the more relevant and necessary for the court to consider sensitive material which bears directly on this issue in order properly to try the case.”

No date has yet been set for the secret hearing. Both Rahmatullah and Ali have since been freed and returned to Pakistan.