London: Britain said on Thursday it would not appeal against a court ruling that parts of a Brexit scheme to protect the status of millions of Europeans living in the country is unlawful.

Under the government's "EU Settlement Scheme", some five million Europeans have been granted temporary (pre-settled) or permanent (settled) status.

But critics argue the policy is incompatible with the UK's Brexit deal with the European Union because it will automatically make nearly three million people given pre-settled status "illegal overstayers" if they fail to make another application.

In his ruling, judge Peter Lane agreed last year that if the UK government's interpretation of the law was correct, "a very large number of people face the most serious uncertainty".

He concluded that the interior ministry had incorrectly interpreted the law stemming from the 2020 Withdrawal Agreement between London and Brussels, as it could potentially deprive applicants of their rights.

The government initially said it would appeal against the decision, but on Thursday told AFP it would accept the ruling.

"After careful consideration, we have informed the court that we do not wish to pursue the appeal," it said in a statement.

"We are working to implement the judgment as swiftly as possible and will provide an update in due course."