Golden shares used in the UK and Spain to protect privatised companies from takeovers are illegal and should be scrapped, the European Court of Justice has ruled.

The court said special shares arrangements for the British Airports Authority (BAA) and a Spanish law effectively allowing the government to veto takeovers of energy firms Repsol and Endesa, telecoms group Telefonica, the Argentaria bank and tobacco company Tabacalera, could not be justified.