The grandparents of a severely disabled teenager have vowed to fight on after a losing a legal challenge against the so-called "bedroom tax".

Paul and Susan Rutherford care for 14-year-old Warren, who has a rare genetic disorder which means he is unable to walk, talk or feed himself and is doubly incontinent, at their home in Clunderwen, Pembrokeshire.

The family live in a three-bedroom bungalow, adapted for Warren's needs, with the Rutherfords in one room, Warren in another, and the third needed for carers staying overnight and to store equipment.

They launched a judicial review over regulations, introduced in April last year, which have led to reductions in housing benefit payments to tenants in social housing assessed through controversial "size criteria" to be under-occupying their accommodation.

The regulations allow for an additional bedroom if the claimant or their partner require overnight care but there is no provision for children who need an overnight carer.

Today, after Mr Justice Stuart-Smith dismissed their case, Mike Spencer, solicitor for Child Poverty Action Group, which represented the couple, said they were bitterly disappointed with the outcome and would appeal.

The judge, sitting at London's High Court, said that a discretionary housing payment made by Pembrokeshire County Council covered the rental shortfall until April 2015 and there was no evidence to suggest it would refuse to make up the shortfall in the future.

"Throughout the writing of this judgment I have kept at the forefront of my mind that Warren is grievously disabled and that his grandparents have undertaken a heavy responsibility and burden. The need to make an application for a discretionary housing payment is an additional burden."

But, he added, it was not substantial in the context of a scheme that was introduced to meet a compelling social and political objective at a time of extreme national financial austerity and the fact that the Rutherfords had suffered no financial detriment and should not suffer any in the future.

Mike Spencer, solicitor for Child Poverty Action Group, which represented the Rutherfords, said later that families with severely disabled children should be entitled to the same exemption as disabled adults and not have to rely on uncertain discretionary payments.

"Pau l and Sue work round the clock to care for Warren and have the constant fear hanging over them that Warren might lose his home and have to go into care."

Mr Rutherford, 56, said: "There are other families across the UK with disabled children like our Warren - and they don't even get these discretionary payments.

"The trouble is that a discretionary housing payment is just that - it is discretionary. There is no guarantee for people in our situation that they will get it and for how long.

"The other thing is that we had to fight incredibly hard in order to get the payments in the first place. It's not an easy process.

"T he Government ought to help families like ours with legislation. The current system is unfair. We will be contesting the judicial review decision as we still believe we have a good case."

A spokesman for the Department for Work and Pensions said: "We are pleased that the courts have once again found in our favour and agreed our policy is lawful.

"We have made £345 million available to councils since the reforms were introduced to help vulnerable families who may need extra support.

"The removal of the spare room subsidy is a fair and necessary reform. It will give families in overcrowded accommodation hope of finding an appropriately sized property and help bring the housing benefit bill under control."

Labour's Welsh Assembly Member for west Wales, Rebecca Evans, said the Rutherfords' case was a prime example of how the so-called "bedroom tax" was unfair.

"Relying on discretionary payments from the council to cover the bedroom tax shortfall means the Rutherfords live with constant uncertainty about the future. They deserve better than that," she added.

"Paul and Susan work around the clock to ensure that Warren is happy and well looked after.

"As Warren needs 24-hour care from at least two people, the family has carers most days who also stay over some nights to help. That to me is a perfectly legitimate use of a bedroom."

Ms Evans added other families in similar positions had been refused discretionary payments from councils.

She added: "So, the court's decision for the Rutherfords will also be a bitter blow to them too."