The Bush administration is refusing to abandon military tribunals for Guantanamo Bay inmates despite the Supreme Court ruling the "war on terror" trials illegal, which leading newspapers called a victory for law.

In a stunning blow to the legal strategy pioneered in the wake of the September 11 attacks in 2001, the high court ruled Thursday that President George W. Bush had no authority to order such tribunals, which it said contravened the Geneva Conventions.

In a 5-3 vote, the high court warned the administration had no "blank check" to decide how to try terror suspects, as it reversed an appeals court ruling on a tribunal for Osama bin Laden's former driver Salim Ahmed Hamdan.

But the White House and other administration officials quickly signalled they would try to consult with Congress to refine rules for such commissions, in line with the landmark Supreme Court judgement.

They also stressed the decision did not mean Guantanamo would quickly shut down.

"Nobody gets a 'get out of jail free' card," said White House spokesman Tony Snow.

The Washington Post and The New York Times on Friday hailed the decision as "a victory for law," while the ultraconservative Washington Times condemned it as a dangerous restriction of presidential authority.

The first tribunals were set up June, 2004. Officials said Thursday that between 40 and 80 Guantanamo detainees were considered eligible for war crimes trials. Only 14 have been publicly identified and of those only 10 have been charged, including Hamdan.

The Senate Armed Services Committee meanwhile said it would hold a series of hearings on what to do next, to prepare the way for possible legislation in September.

Committee Chairman Senator John Warner said he would make the issue a "top priority."

The idea that Bush could ask Congress to approve a remodelled tribunal set-up was first mooted by Supreme Court justices themselves, in a concurring document to the court's main opinion written by Justice John Paul Stevens.

"Nothing prevents the President from returning to Congress to seek the authority he believes necessary," wrote Justices Breyer, Kennedy, Souter and Ginsburg.

A senior official later Thursday argued that the court had "emphasized these problems can be cured and invited the president and Congress to do just that."

The Supreme Court found that tribunals created by Bush infringed US law. It rejected administration claims that Congress had authorized them by granting Bush sweeping war powers after the September 11 attacks.

Justices also rejected the administration argument the Geneva Conventions do not apply to tribunals of suspected Al-Qaeda and Taliban detainees as they are not prisoners of war but "enemy combatants."

"Whether or not the government has charged Hamdan with an offence against the law of war, cognizable by a military commission, the commission lacks power to proceed," the court said in the majority opinion.

The concurring opinion signed by the four justices rejected claims the decision would undermine the "war on terror."

"The Court's conclusion ultimately rests on a single ground: Congress has not issued the Executive a 'blank check.'"

"Indeed, Congress has denied the President the legislative authority to create military commissions of the kind at issue here."

Conservative Justice Clarence Thomas warned in a dissent that the majority ruling meant that terrorists needed to be caught "red handed" before they could be tried under the laws of war.

"It would sorely hamper the President's ability to confront and defeat a deadly enemy," he wrote.

The ruling also rejected administration arguments that a new US law passed last year stripped the jurisdiction of federal courts over Guantanamo cases.

Chief Justice John Roberts had recused himself from the case -- because he was one of the appeals court judges who adjudicated the case overturned by his colleagues on Thursday.

Hamdan's attorney, Lieutenant Commander Charles Swift, said the ruling meant his client would now get a fair trial.

"It's a return to our fundamental values, and that return marks a high water point in America history," Swift told reporters.

Anthony Romero, executive director of the American Civil Liberties Union, said the verdict showed the Bush administration "may not run roughshod over the nation's legal system."

The case centered on an appeal by Hamdan, a 36-year-old Yemeni who was captured in Afghanistan in November 2001, over the constitutionality of the tribunals.

Defense officials said they would leave it to lawyers for Hamadan, imprisoned at the Guantanamo Naval base on a remote corner of Cuba, to inform him of his victory.