Judges upheld a government decision not to hold a public hearing into the alleged massacre in the former colony.
They said it would be "very difficult" to establish now whether the actions of the Scots Guards had been "deliberate".
Relatives of the victims plan to appeal, and said evidence in the case proved those shot were not insurgents.
Missing documents
The killings occurred at Batang Kali in the Malayan state of Selangor in December 1948, at a time when the country was part of the British Empire.
The so-called Malayan Emergency, which lasted until the late 1950s, saw British troops put down a communist-inspired revolt.
At the time the British government said the villagers had been suspected insurgents killed trying to escape.
A later claim that the killings were premeditated was subject to a police investigation in the 1960s, but this was dropped because of a lack of "sufficient evidence".
The government rejected a call in 2009 for a public inquiry, saying two previous investigations had found insufficient evidence to pursue prosecution and that without new evidence, it would take no further action.
In his ruling Sir John Thomas, president of the Queen's Bench Division of the High Court, sitting with Mr Justice Treacy, said: "In our judgment, the decisions of the secretaries of state were ones that took into account the relevant considerations and were not unreasonable.
"There are no grounds for disturbing their conclusion. In our judgment, they had regard to the relevant factors and weighed them carefully and reached a conclusion which it was plainly open to them to reach."
Sir John added: "The first matter in relation to the purpose of inquiry is to consider whether it can establish the facts.
"There are obviously enormous difficulties in conducting an inquiry into a matter that happened over 63 years ago. Most of the contemporary documents are missing and most of those who were engaged are dead.
"All in all, it would appear to be very difficult at this point in time to establish definitively whether the men were shot trying to escape or whether these were deliberate executions.
"Nor, in our view, would it be any easier to determine whether the use of force was reasonable or proportionate."
'Deeply regrettable'
At a hearing in May, the High Court heard there was no dispute that 24 people were killed by the Scots Guards in Batang Kali, but the question was how and under what circumstances.
The court was told police and the Attorney General of the Federation of Malaya - a British colony - investigated the killings at the time and concluded that those who were killed were suspected insurgents shot while trying to escape.
Malaysia gained its independence in 1957, and in 1970 the director of public prosecutions asked the Metropolitan Police to investigate Batang Kali after revelations in The People newspaper suggesting the 24 had been deliberately executed and a massacre covered up.
The newspaper interviewed four of the Guardsmen, who said those who died had not been trying to escape but were killed on the orders of the two sergeants. The sergeants were also interviewed by the paper but stuck by their original statements from 1948.
Further probes into the killings were made in the 1990s, but in their ruling the judges noted that it was "difficult to escape the conclusion" that John Major's Conservative government decided to "progress any inquiries with as much delay as possible".
In 1992 a BBC documentary, In Cold Blood, sparked another blaze of publicity but the Crown Prosecution Service considered there should not be a prosecution.
And a fresh investigation by the Royal Malaysia Police between 1993 and 1997 "obtained virtually no assistance" and was met with an "uncooperative attitude" from the UK, the judges said.
After Tuesday's ruling, a government spokesman said: "This was clearly a deeply regrettable incident and we extend our sympathy to the families and survivors for the loss of life and suffering.
"We have always said that a public inquiry would not be able to reach any credible conclusions given the length of time passed.
"Furthermore, we did not feel that the interests of justice would have been served by spending significant sums on further investigations for which there have been a number of previous inquiries."
'You have to ask why'
But Chong Koon Ying, whose father was killed, said in a statement: "I am disappointed with the finding that no inquiry is required. The truth has not been fully revealed."
John Halford, a solicitor representing the relatives, said they would be asking the Supreme Court to overturn the High Court decision.
But he called on the government to "do the right thing" and "end the ongoing injustices at the heart of this case".
He said the judges' ruling backed the families' long held contention that the victims had been unarmed and in civilian clothing at the time.
It also stated the government legally had "command and control over the Scots Guards" at the time, and Mr Halford pointed out that this was something ministers had always disputed.
Mr Halford added: "The ruling makes it clear that the British government decided to be uncooperative to the Malaysian police...
"The Malaysian police investigation was scuppered by British civil servants, and you have to ask why that was."-British Broadcasting Corporation (September 04, 2012)
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