The Heath and Hampstead Society sought a judicial review of the decision by the corporation in June to approve £17 million of reservoir safety works to the ponds on Hampstead Heath, if planning permission by the London Borough of Camden is granted.
The case was heard in the High Court on 13 and 14 November.
Judge Mrs Justice Lang gave permission for the case to be heard under a judicial review but dismissed the claim.
The case centred on an argument by The Heath and Hampstead Society that the works were unnecessary as flooding had not been an issue in 250 years and that they would disturb the "wild and natural state" of the heath, protected under the Hampstead Heath Act 1871. QC Stephen Tromans, acting for the group, claimed the plans breached several aspects of the Act.
He also referred to the Reservoirs Act 1975, under which the corporation produced its plans following an Environment Agency inspection in 2007, saying that officers had gone further than the Act’s requirement to ensure a "reasonable" level of safety and opted for an "absolute" level, and that this was "an irrational approach to risk based on the assumption that residents downstream of the ponds would have no advance warning of a dam breach".
He argued that north London residents at the bottom of the hill would have several hours’ warning of a flood caused by dam breach.
However expert dam engineer Dr Andrew Hughes, adviser to the corporation since 2010, warned that a failure of a dam in a built up area would likely lead to loss of life.
His assessment was that "dam breach releases a wall of water onto the community downstream, overwhelming any drainage system. The volume of water and velocity of flow can knock people and buildings over.
"It is difficult to predict exactly how quickly a dam will fail, but once overtopping starts then a dam could fail within minutes. Failures could occur at any time and at short notice. Once erosion starts it is a self-perpetuating process that is virtually impossible to stop. It is thus important that the mechanisms for dam failure are eliminated."
Overtopping on the heath last occurred in the ponds in 2010.
The corporation also commissioned reports from consultants Haycock Associates, CARES, AECOM and Atkins.
Justice Lang dismissed the claims saying that the works planned did not breach the HHA Act as the reservoirs, were man-made works created long before the Act was passed and in addition had been repaired and upgraded several times since.
They also fulfilled the corporation responsibilities under the Reservoirs Act 1975. In addition, she ruled, the Flood and Water Management Act 2010 may, when fully implemented, classify all the Heath ponds as "high-risk reservoirs", a new category which will impose extra safety and inspection provisions on landowners.
She also acknowledged that the works were sensitive to the landscape.
Superintendent of Hampstead Heath, Bob Warnock, said: "This decision shows that our interpretation of the law and guidance is correct – and it means that the Heath’s landscape can remain at the heart of the scheme.
"We are protecting the Heath, improving its ecology and water quality, whilst ensuring that the earth dams are strong enough to meet modern safety standards. We have a legal duty to make sure the dams on the Heath do not fail, an event which would have serious consequences to the residential community downstream."
The ponds were created to provide drinking water for London’s citizens by damming the natural springs and streams in the valleys, on either side of Parliament Hill, which were the source of the Rivers Fleet, Kilburn, Tyburn and Brent, now incorporated into London’s underground sewer system.
Today, the ponds are still supplied by natural springs. Each pond in the chain is linked by pipes and/or streams allowing the water to flow down to the adjacent lower pond. The lowest pond in each chain discharges into the sewers.