A multi-million pound London murder trial that involved anonymous evidence was halted on Tuesday, after a ruling that defendants should know the identity of witnesses testifying against them.

The trial of two men accused of the contract killing of an east London businessman was "derailed" due to last week's House of Lords ruling, Old Bailey judge David Paget said.

The trial had heard Charles Butler, 50, died nine months after being shot in the neck outside his Dagenham, east London, home.

Prosecutors say the gunman was Douglas Johnson, 27, who was driven from the scene by David Austin, 41. The two south London men deny being involved in the October 2004 murder.

The case is the first to be halted in light of the judgment from Britain's highest court that puts the use of anonymous witnesses in serious doubt.

As a result of the judgement, police fear dozens of cases could be adversely affected and lead to a series of appeals by people who have been convicted based on anonymous evidence.

In recent weeks, the killers of youth worker Nathan Foster, schoolboy Michael Dosunmu and Polish care worker Magda Pniewska have been convicted on the back of such evidence.

Justice Secretary Jack Straw said at the weekend that he was considering whether to give witnesses more protection through new legislation, rather than relying on common law.

On Tuesday, Judge Paget said the multi-million pound case was being stopped despite jurors having already heard two months of evidence.

"I am afraid I will have to discharge you and order a retrial in the New Year," Judge Paget told the surprised jury.

"Last Wednesday, the House of Lords decided, in a very far-reaching judgment, that evidence from anonymous witnesses cannot be admitted.

"The reason for that is because of the difficulties caused to the defence if they do not know the identity of witnesses against them and are deprived of investigating whether these people may be inaccurate, or worse, untruthful."

A spokeswoman for the Crown Prosecution Service (CPS) said the trial had not collapsed.

"There remains sufficient evidence for a reasonable prospect of conviction," she said outside court.

A Ministry of Justice spokesman said: "We are studying the (Lords) judgment carefully and urgently considering its implications, including amending statutory law."

A retrial in the case is expected next year.