The union had faced paying costs and damages amounting to a six-figure sum when the High Court ruled in favour of Timeplan. Steve Sinnott, the union’s deputy general secretary, said he was delighted the appeal judges had overturned the verdict.

The judgment does not deal with the status or practices of teacher supply agencies.

The case was to determine whether the NUT had “unlawfully interfered” with Timeplan’s recruitment advertising. The agency claimed a letter from the NUT to the magazine of the New Zealand Education Institute had led to it dropping adverts for Timeplan. Many of the supply teachers on its books are from Australia and New Zealand.

The NUT has been campaigning against supply agencies which do not recognise nationally determined pay and conditions. Doug McAvoy, general secretary, said: “The union’s concern has always been for those teachers who have been underpaid and employed on unfavourable terms and conditions, and to ensure the education and welfare of children.”

Last year, the union made an agreement with the Capstan agency and said it would try to bring other agencies into the agreement.

Since the court case, the Education and Employment Secretary has changed the regulations in favour of Timeplan by allowing the appointment of qualified teachers from overseas. But the union also claims its campaign has influenced the Government. A clause in the Education Bill, which completed it committee stage in the House of Commons this week, requires all teachers, even those working as self-employed for an agency, to be covered by regulations imposed by the Secretary of State.

Tish Seabourne, Timeplan’s managing director, maintains that 85 per cent of the agency’s teachers are paid more than national pay scales. She said she did not want to comment until she had read the written judgment.