A Bangladesh high court has dismissed an appeal by Begum Khaleda Zia, a former prime minister, to stop a breakaway group from representing her party in key talks with the election commission.
The decision would strengthen claims by the breakaway faction to be the true representatives of the Bangladesh Nationalist Party (BNP), lawyers said.
"As the appeal was rejected, the breakaway faction is now legally validated as the mainstream BNP," Kamal Hossain, the election commission's lawyer, told reporters on Thursday.
The rejection of her appeal was the latest blow for Khaleda, 62, who has been under detention since June facing multiple charges of corruption and abuse of power.
Her two sons are also in jail facing similar charges.
Khaleda had challenged the commission's decision to hold talks with Hafizuddin's group on conduct of elections expected later this year after a group of party leaders installed him as leader following Khaleda's detention.
Khaleda's supporters rejected that appointment, saying that only she was authorised to name a successor.
"The leadership in the party is purely a political matter and should be resolved politically," the high court said in its ruling upholding the election commission decision to invite Hafizuddin's group for talks.
The country's army-backed interim administration plans to hold the elections later this year after completing a crackdown on corrupt politicians and officials.
More than 170 political figures have been arrested in the anti-corruption drive, and of them nearly 40 have been sentenced to varying terms in prison.
Khaleda was prime minister between 1991 and 1996 and again from 2001 to October 2006, when she handed over power to a caretaker administration ahead of elections.