After two months of careful deliberation, Mr Justice Andrew Smith today delivered a hefty 120-page judgment in a landmark test case on unauthorised overdraft charges. It was a resounding victory for the Office of Fair Trading and for consumers who have been stung by penalties of up to £39 for exceeding their overdrafts.

But as the High Court judge was well aware, this was only the first act in what is set to be a protracted and extremely costly legal battle.

The first hearing, held over 14 days in January and February, was merely to decide whether the overdraft penalties come under the jurisdiction of the 1999 Unfair Terms in Consumer Contract Regulations.

According to the judge, the regulations do apply. But that hurdle cleared, the case now moves on to a second hearing, later in the year, to decide the real issue: whether the charges are unfair.

Even then, the battle will be far from over. So important is the case, so high are the stakes, it is likely to be appealed all the way to the House of Lords, regardless of which side emerges victorious from the initial skirmishes.

The banks in particular, with between £2 billion and £3.5 billion a year in revenue at stake, are prepared to fight as long as it takes.

One only has to look at the dazzling line-up of legal talent they have assembled to represent them. The dream line-up of Queen's Counsel, instructed by some of the country's most powerful solicitors firms, is so vast that the proceedings had to be moved from the Royal Courts of Justice on the Strand to a larger venue on Fleet Street. It is understood that each bank had spent more than £1 million on legal fees before the hearing began.

For consumers hoping for a refund, there will be a long wait. Tens of thousands of claims, including many before the county courts, have been put on hold pending the outcome and it is unlikely that the stay will be lifted after today's ruling.

District Judge Stephen Gerlis, who sits at Barnet County Court in north London, said that claims would likely be kept on hold until the courts have a final, definitive ruling to guide them. That means waiting until the appeal process has been exhausted, which is likely to take months. He said: There is little point in claims being heard while these matters remain unresolved."

In the mean time, the banks have been given permission by financial authorities to continue levying the charges at the same rate.

Consumers are likely to lose out even if the OFT is ultimately successful. The banks have already warned that the revenue derived from the charges will have to come from somewhere else if they are forced to abandon them — and that almost certainly would mean an end to free current accounts.

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