The Supreme Court of Canada has sent a landmark case involving journalists' right to protect confidential sources back to a lower court.

The ruling Thursday gave guidelines to the Quebec Superior Court judge who initially ruled that a Globe and Mail reporter must answer questions about an anonymous source.

Reporter Daniel Leblanc has refused to name the source who gave him information leading to investigative stories on the federal sponsorship scandal.

The court was asked to decide whether or not Leblanc had the right to refuse to divulge the identity of his anonymous source in a case arising from the sponsorship scandal.

Montreal media company, Le Groupe Polygone éditeurs Inc., wanted to force Leblanc to reveal the identity of a key source in his stories in order to defend itself against a $35-million federal lawsuit aimed at recouping money the former Liberal government paid the firm.

Two years ago, a Quebec judge ordered Leblanc to answer questions from Polygone lawyers about the identity of his source – identified only as Ma Chouette, or "my sweetie" – as well as giving the dates on which he spoke to the source and whether the person worked for the government.

Leblanc would not answer the questions and the Globe launched an appeal of the order.

The newspapers argued in their appeal that anonymous sources play a vital role in exposing government wrongdoing.

Globe lawyer William Brock said that forcing Leblanc to answer the questions about his source would violate "a solemn promise" not to reveal the source's identity. "This would reduce freedom of the press to an empty shell," Brock said in oral arguments to the court.

Polygone lawyers argue that the rights of an informant are overridden by the company's right to defend itself in a serious lawsuit.