Mr Sheridan won the high-profile case against the newspaper in 2006 after it printed allegations about his sex life, which included claims he visited a swingers’ club.
The paper was ordered to pay £200,000 in damages, but weeks later a police investigation was launched into allegations of perjury and Mr Sheridan was charged.
He was jailed after being found guilty in December 2010 of lying under oath during the successful defamation action, and was freed from prison after serving just over a year of his sentence.
Mr Sheridan has always denied the allegations and launched an unsuccessful attempt to appeal against his conviction.
The case returned to the courts in May as News Group Newspapers (NGN) wanted to have the 2006 civil jury verdict set aside, but judges at the Court of Session in Edinburgh have now refused the application.
A written summary of opinion issued by Lady Paton, Lord Drummond Young and Lord McGhie said the reasoning of the jury “was not undermined by the perjury conviction”.
The judgement read: “The jury in 2006 heard all the evidence. They were thus well informed. Moreover they saw and heard the witnesses as they gave evidence and were able to assess not only the content of their evidence but also the way in which it was given.
“It was the jury’s function to assess the credibility and reliability of witnesses; to decide whom to believe and whom to disbelieve; to determine what inferences could be drawn from the evidence which they accepted; to weigh up questions of current social standards, practices and mores and to apply the legal directions given by the judge...”
“This court should therefore be slow to interfere with any verdict reached by the jury.”
Following yesterday’s verdict, a spokeswoman for News UK, which NGN is part of, said: “We are disappointed by today’s outcome of our appeal given Mr Sheridan’s criminal conviction for perjury in giving his evidence to the Court in the original libel trial.
“We are now considering all our options”.
Mr Sheridan tweeted “Beat criminal cancer which Murdoch’s NGN represents.
“Their spurious appeal defeated.”