The Danish government on Friday won a legal battle against a freewheeling neighborhood that has remained largely self-governing since its creation by hippie squatters four decades ago.

The Supreme Court upheld a lower court decision from 2009 saying the roughly 900 residents of Christiania have no irrevocable right to use the former naval base as their home.

The decision ends a six-year legal standoff and means the government can go ahead with plans to "normalize" the neighborhood and tear down scores of ramshackle homes built at the site without permits.

Residents say they will resist any attempts to evict them from the neighborhood, which has become a major draw for tourists curious about its counterculture lifestyle and liberal attitude toward soft drugs.

"The court process is now finished," Christiania spokesman Thomas Ertman said. "We have to now look to the future and need to sit down with the state and work out a negotiation for Christiania."

Ertman emphasized that a political solution needed to be found as the residents don't intend to move.

There was no immediate comment from the government over the verdict.

Christiania was formed in 1971 when hippies moved into an abandoned naval base and built an alternative society with houses painted in psychedelic colors and hashish traded and smoked in the open, while authorities turned a blind eye.

That all changed when a center-right government took power in 2001. Initially authorities cracked down on the drug trade, which had been taken over by criminal gangs, then they launched a plan to redevelop the area, charge residents rent and allow outsiders to move in.

Residents currently don't pay rent, but a fixed, monthly fee of 1,600 kroner ($290) for electricity, water and other municipal services.

A somber mood descended on the normally cheerful enclave after the verdict.

"Its terribly sad," said 41-year-old Iben Kramp, a frequent visitor to the neighborhood. "Christiania is an oasis in a hectic modern world. We have something unique here in Copenhagen and we should not be killing it off in the name of normality."

Polish tourist Julian Jablonski, however, said change was inevitable.

"Christiania needs to wake up and get into the 21st century," he said. "This is a prime location in the heart of the city and you cannot stop progress."