"The law should be upheld because if it is annulled ... Islam and the Quran could be interpreted at will and people and figures could declare new prophets and establish new religions,'' Suryadharma Ali, Indonesia's minister of religious affairs, said before the ruling.
The law is supported by religious conservatives, including the Islamic Defenders Front, which gathered at the court and threatened to protest if the judges did not
Critics say the law is vague, allowing authorities to interpret and enforce it how they choose, which they say has largely been used against those seen as offending mainstream Islam.
The government used the blasphemy law in the past to outlaw religious groups, including Ahmadiya, a minority Islamic group banned in 2008 whose members identify themselves as Muslims but do not believe in the core tenet of Islam that Muhammad is the last prophet.
They also say conservative Islamic groups have used the law as justification
for violent attacks on minority religious groups.
'Blow to freedom'
Human Rights Watch (HRW), a US based rights organisation, said the ruling "dealt a severe blow to religious freedom" in the world's third-largest democracy.
"Indonesia's laws should protect those who peacefully express religious views and punish those who threaten to use violence against others, not the other way around," Elaine Pearson of HRW said.
The US commission on international religious freedom, a non-partisan body that advises the US government, said the ruling may embolden religious extremists and foster sectarian strife.
Chairul Annam, one of the lawyers arguing for the law's repeal, said "the judges closed their eyes and hearts.
We are very sorry that discrimination suffered by minorities in this country was not recognised by the court."