The Home Office has lodged an appeal against a High Court ruling that an Australian man imprisoned at Guantanamo Bay has a right to British citizenship.
David Hicks has been held at Guantanamo Bay for three years
David Hicks, 30, whose mother was born in Britain, was detained in Afghanistan in 2002 and has since been held by the US at Camp X-Ray in Cuba.
Two weeks ago a judge decided the home secretary had no power to stop him receiving a British passport.
His father Terry Hicks said the moves to contest this ruling were a blow.
He said: "David's going into the New Year with just the attitude of let's hope things will be a bit better and maybe something will go right for him on one occasion.
"But I suppose after spending four years in a situation like he has, hope is probably a long way out of his grasp."
Campaigners had hoped High Court the ruling would make the government work for his release.
The Muslim convert - who has been referred to as the "Australian Taleban" - has been accused by the US of charges of conspiracy to commit war crimes, attempted murder and aiding the enemy. Mr Hicks denies all the allegations.
Australian authorities have made no effort to secure the release of the Adelaide man.
The Home Office accepted Mr Hicks was entitled to citizenship but said it can be refused or withdrawn because of the charges Mr Hicks faces.
A Home Office spokesman said: "The ruling by the courts was a disappointment. The Home Office was granted permission to make an appeal and we have done so."
Mr Hicks's lawyers discovered their client's links to the UK during a discussion about cricket in September.
This allowed him to apply for a UK passport, which may represent his best chance of avoiding a trial before a military tribunal.
His lawyers said the UK has made more efforts to secure the release of its citizens from imprisonment in Guantanamo Bay.
Earlier this year nine British detainees were sent home from Guantanamo Bay after the government complained Camp X-Ray failed to uphold basic standards for international justice.