A nanotechnology company spun out of Oxford university and backed by a former star of the BBC TV show Dragons’ Den on Friday lost a high-stakes court battle over royalties due on its key product.

Shares in Aim-listed Oxonica, which is chaired by Australian business angel and ex-dragon Richard Farleigh, slumped by as much as 16 per cent after the High Court ruled that it owed licensing fees to another company over Envirox, a “green” fuel additive designed to improve efficiency.