The United States Government filed the lawsuit last year accusing him of defrauding the U.S. Postal Service, who sponsored Armstrong's team, by taking millions of dollars in sponsorship money while taking banned performance-enhancing drugs.

US federal judge Robert Wilkins has issued an 81-page ruling detailing why the action can go ahead, paving the way for a long and drawn out legal battle.

Armstrong's lawyers had argued the case was too old to be brought against the cyclist, who had seven Tour de France titles between 1999 and 2005 stripped two years ago.

They also argued the US Government should have known about Armstrong's doping but did not stop it.

Floyd Landis, a former team mate of Armstrong who himself was stripped of his 2006 Tour de France title, originally filed the action in June 2010 under the False Claims Act.

The Act allows whistleblowers to pursue fraud cases on behalf of the Government.

Floyd Landis (left), pictured with former team mate Lance Armstrong, originally filed the lawsuit in 2010 ©AFP/Getty Images



Landis stands to gain up to 25 per cent of the amount the Government recovers.

Throwing out Armstrong's bid to have the case thrown out, Wilkins, in Washington D.C., said complaints brought by the Government and Landis were "rife with allegations that Armstrong had knowledge of the doping, and that he made false statements to conceal the doping and the attendant obligation which would have resulted if the Government had known of the doping".