Elon Musk has lost a legal bid to reinstate his huge $56bn pay deal at Tesla, even after shareholders backed the deal.

A Delaware court on Monday refused to allow the historic reward for the world’s richest man, which has already been rejected by the courts once before.

Mr Musk had been due to receive $56bn (£44bn) in pay from Tesla under a historic compensation package struck in 2018. The payout would be one of the biggest in US corporate history.

It was ruled unlawfully big earlier this year but both Tesla and Mr Musk had been seeking to overturn that ruling.

However, Judge Kathaleen McCormick on Tuesday denied a request by lawyers for Mr Musk and Tesla’s directors to set aside her earlier judgment made in January.

The historic reward was a result of a 2018 agreement between Mr Musk and the Tesla board, promising the payout only if he drove the company’s valuation beyond $650bn. At the time of the deal, Tesla was worth just $50bn but is now worth $1.1 trillion.

But the judge concluded in January that Mr Musk engineered the landmark pay package in sham negotiations with directors who were not independent. She said that the money involved was “an unfathomable sum” that was unfair to shareholders.

The package initially carried a potential maximum value of about $56bn, but that sum has fluctuated over the years based on Tesla’s stock price.

Mr Musk, who is said to be worth around $350bn, has fought to reinstate the deal. Following the original court ruling, Tesla shareholders voted in June to ratify Mr Musk’s 2018 pay package by an overwhelming margin following intense lobbying by the billionaire and his board allies.

Tesla has said in court filings that the judge should recognise a subsequent June vote by its shareholders in favour of the pay package.

The judge said in Monday’s ruling that such arguments were fatally flawed.

“The large and talented group of defense firms got creative … but their unprecedented theories go against multiple strains of settled law,” Judge McCormick wrote in a 101-page opinion. “Were the court to condone the practice of allowing defeated parties to create new facts for the purpose of revising judgments, lawsuits would become interminable.”

Mr Musk, a confidant of incoming US president Donald Trump who is to run the Trump administration’s Department of Government Efficiency, can still appeal to the Delaware Supreme Court.

After the original judgment, Mr Musk posted on the social media site X: “Never incorporate your company in the state of Delaware”.

Tesla shares dropped 1.3pc in after-hours trading.