The Government did not break the law over contracts handed to friends of Dominic Cummings, a court has ruled.
Campaign group the Good Law Project is now seeking to take the case to the Supreme Court.
Last year, the High Court ruled that the Cabinet Office's decision to award a contract to market research firm Public First was unlawful as it gave rise to "apparent bias".
The organisation was given a contract for over £550,000 in June 2020 for focus groups and other research - including testing public health slogans such as "Stay at home, protect the NHS, save lives".
The Good Law Project brought a case over the links between the firm's founders and the Prime Minister's former adviser as well as then-Cabinet Office minister Michael Gove.
In the original ruling, Mrs Justice O'Farrell found that the "apparent bias" was not due to the existing relationships between Mr Cummings and Public First but because of a failure to consider any other research agency and record the objective criteria used in the selection.
However, in a judgment on Tuesday, the Court of Appeal overturned the previous ruling.
The Lord Chief Justice Lord Burnett, sitting with Lord Justice Coulson and Lady Justice Carr, found that the original judgment was an "unprecedented outcome".
Lord Burnett concluded: "The fair-minded and reasonably informed observer would not have concluded that a failure to carry out a comparative exercise of the type identified by the judge created a real possibility that the decision-maker was biased."
Dominic Cummings said the Court of Appeal ruling was "total vindication for my decisions on moving super speedy on procurement to save lives".
The Good Law Project said it was now seeking permission to take the case to the Supreme Court.
Jo Maugham, Director of Good Law Project, said: "We haven’t lost a case in court since 2019. But you don’t win everything forever - especially when you are fighting the most difficult cases in the most difficult terrain.
“That having been said, we do think the Court of Appeal has got it wrong. We think it is very important that the public purse be protected from decisions that favour the friends of those holding the strings. We’ll be asking the Supreme Court to hear our case."
A Cabinet Office spokesperson said: “We welcome the Court of Appeal’s ruling that this contract was awarded entirely lawfully. “This includes the court’s firm rejection of the allegation of apparent bias, overturning the previous judgment.
"Throughout the pandemic our priority has always been to save lives and the work by Public First helped to improve vitally important health messages."
