The Professional Football League (LFP) and 18 of the 20 Ligue 1 teams had made an urgent appeal to the Council of State to support their proposal of two up, two down, which had been initially thrown out by the French Football Federation.
The Council of State said there was a "lack of urgency" as they rejected the appeal and insisted that there should continue to be three up, three down at the end of this season.
However, the case is set to drag on, with the announcement just the first step in the judicial process. There will be further talks between the parties, meaning the matter will not be settled definitively until possibly January 2016.
It has caused a scission between top-flight clubs and those in France's Ligue 2, with those in the top tier saying reducing the number of relegated teams would create a less risky environment and would encourage more outside
Those in Ligue 2, meanwhile, are more concerned by the idea of losing one promotion spot and see the move as a first step in an attempt by the country's biggest clubs to make Ligue 1 a closed shop that sells its own broadcast rights -- along the lines of the English Premier League.
Clubs in Ligue 1 are desperately looking for ways to increase revenues as they continue to lose their best players to the super-rich Premier League.