Ian Brady will stay at a maximum security hospital after losing his £250,000 legal bid to be transferred to a jail.
The decision, which follows a week-long public hearing, means the Moors Murderer will remain at Ashworth Hospital on Merseyside on the grounds that he is mentally insane.
The tribunal was the first time Brady has been seen in public since the 1980s, when he was taken back to Saddleworth Moor in the search for the bodies of two of his victims.
The hearing was also the first time he had spoken in public since being jailed for life at Chester Assizes in 1966.
But families of the victims have criticised the mental health tribunal, saying it gave Brady the opportunity to "grandstand".
The decision on Brady's appeal was given by the three-man panel headed by Judge Robert Atherton, who heard the tribunal at Ashworth Hospital.
Reasons for the decision will be given at a later date because of the length of the material the panel needs to consider.
Brady, pictured in 1966, is one of Britain's most notorious killers After the ruling, Dr David Fearnley, medical director at Ashworth, said the judgement was "consistent with the expert opinions of our clinicians".
"Ashworth Hospital has been subject to in-depth scrutiny and the public has been able to see at first hand the quality of care which we offer to all of our patients," he said.
"Mr Brady suffers from a severe personality disorder and a mental illness which still require high quality care.
"It is a testament to the staff of Ashworth Hospital that we have been able to stabilise his schizophrenia to the degree we have.
"However, his condition is chronic and will require this support for the foreseeable future."
Terry Kilbride, whose brother John was one of Brady's victims, said he had "good reaction" to the decision.
"It means that they're going to keep him alive," Mr Kilbride said.
Brady has been at Ashworth Hospital since 1985 Brady - who claims to have been on a hunger strike since 1999 - told the hearing he was merely "a petty criminal".
He described his crimes as "recreational killings" which were part of an "existential experience".
His legal application challenged the order made under the Mental Health Act when he was transferred from prison to Ashworth in 1985, when he was diagnosed as being a paranoid schizophrenic.
Brady's legal team argued that, despite his severe personality disorder, he is not mentally ill and therefore no longer fulfils the legal criteria for detention in hospital.
He suggested that, if he is allowed to go back to a jail, he would be "free to end his own life" by starving himself to death.
Brady, whose legal costs will be paid by the taxpayer as he gets legal aid, has the right to challenge the decision, which would require a further hearing at an Upper Tribunal.
Brady and his partner, Myra Hindley, were convicted of luring children and teenagers to their deaths, with their victims sexually tortured before being buried on Saddleworth Moor.
Hindley died in hospital, still a prisoner, in November 2002 at the age of 60.
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