WASHINGTON (AP) — The US Supreme Court ruled yesterday that prosecutors erred in using a federal fraud law to convict former Enron chief executive Jeffrey Skilling, but left it to a lower court to determine whether his conviction should be overturned.

The new limits on honest services prosecutions also will lead to a new hearing for former newspaper magnate Conrad Black.

The justices were unanimous in imposing limits on the use of the federal "honest services" fraud law that has been a favourite of white-collar crime prosecutors.

The law has been criticised as vague, subjecting people to prosecution for mistakes and minor transgressions in the business and political worlds. Skilling asked that it be struck down as unconstitutional.

But the justices, in an opinion by Justice Ruth Bader Ginsburg, said prosecutors may continue to seek honest services fraud convictions in cases where they put forward evidence that defendants accepted bribes or kickbacks.

"Because Skilling's misconduct entailed no bribe or kickback, he did not conspire to commit honest-services fraud under our confined construction" of the law, Ginsburg said.

Yesterday's decision does not necessarily mean that any of the 19 counts against Skilling will be thrown out, Ginsburg said. At the same time, by a 6-3 vote, the court rejected Skilling's claim that he did not get a fair trial in Houston because of the harsh publicity surrounding the case in Enron's hometown.

The government argues that both Skilling's and Black's convictions should be sustained, even with the court's ruling yesterday.

Lawyers for the two men say that the entire case against them should be thrown out.

The current prosecution of former Illinois Gov. Rod Blagojevich also could be affected.

Skilling was convicted in 2006 on 19 counts of conspiracy, securities fraud, insider trading and lying to auditors for his role in the downfall of the once-mighty Houston-based energy giant. The company collapsed into bankruptcy in 2001 under the weight of years of illicit business deals and accounting tricks. Skilling is serving a sentence of more than 24 years at a minimum security prison outside Denver.

Black, serving a six-and-a-half-year prison term, and two other former executives were convicted of depriving the Hollinger International media empire of their faithful services as corporate officers. The company once owned the Chicago Sun-Times, the Daily Telegraph of London, the Jerusalem Post and hundreds of community papers across the United States and Canada.

Central to the case is $5.5 million that the defendants say were management fees they were owed and were trying to collect in such a way that they would not have to pay Canadian income tax. The government says the money belonged to the company's shareholders.

Justices Sonia Sotomayor, Stephen Breyer and John Paul Stevens also would have held that Skilling did not get a fair trial in a case in which "passions ran extremely high", Sotomayor said in her dissent.