A closely divided US Supreme Court has ruled that racial preferences can be used in university admission decisions, its first ruling on the important civil rights issue in 25 years.
The nation's highest court upheld the University of Michigan's affirmative action policy that favors minorities who apply to its law school, but struck down the programme for its undergraduate college because it went too far in providing an advantage to minorities.
In upholding the law school's policy, Justice Sandra Day O'Connor said for the majority in the 5-4 ruling that student body diversity is a compelling state interest that can justify use of race in admissions decisions.
In the most closely-watched cases of the court's term, the two rulings could determine the fate of similar affirmative action programs that help minorities gain admission to public and private universities throughout the country.
"By upholding the law school's program the court has actually supplied a road map for all schools in the country on how to have a constitutional program," Ms Maureen Mahoney, a lawyer representing the university, said.
The US Constitution "does not prohibit the law school's narrowly tailored use of race in admissions decisions to further a compelling interest in obtaining the educational benefits that flow from a diverse student body," Justice O'Connor wrote in the 32-page opinion.
The high court last addressed the issue in 1978 with its historic "Bakke v. Board of Regents" ruling, which struck down racial quotas but allowed race to be considered as a factor in university admissions.
Justice O'Connor, a key swing vote on the court divided between conservative and liberal factions, endorsed the opinion by Justice Lewis Powell in 1978 that race can be used as a factor. She said the court deferred to the law school's educational judgment that diversity is essential to its education mission.
She said major American businesses have made clear that the skills needed in today's increasingly global marketplace can only be developed through exposure to widely diverse people, cultures, ideas and viewpoints.
She also said high-ranking retired officers and civilian military leaders have asserted that a highly-qualified, racially diverse officer corps is essential to national security.