The developer whose landmark court victory over Royal Bank of Scotland was overturned on appeal by the bank last month has taken the case to the Supreme Court.

In the original judgment in 2010, Lord Glennie ruled that the bank had been wrong to withhold the final £700,000 development cost of a housing site at Gleneagles, after advancing Derek Carlyle £1.4 million to acquire land that was subject to a buyback clause unless houses were built.

Lord Glennie ruled that the bank had effectively created a "collateral warranty obligation", encouraging Mr Carlyle to proceed with the land deal in June 2007.

The judge also reproached RBS for "lack of candour" in its evidence.

Last month, three appeal court judges overturned the judgment.

They said the bank's action "may have been contrary to the spirit of the negotiations prior to the signing of the written ­agreements, but that spirit, or its moral content, cannot be taken as creating a legally binding voluntary obligation".

The ruling undermines a £3m counter-claim by Mr Carlyle against RBS, who is pursuing the developer for a £2m personal guarantee.

Soon after Mr Carlyle won the original Court of Session case in 2010, the bank was instrumental in his sequestration for a minor debt, prompting Labour MP Jim Hood to accuse the bank in the Commons of sanctioning "a personal vendetta by bank personnel" against his constituent.

Mr Carlyle was subsequently penalised further with a record 12-year bankruptcy restriction order for transferring proceeds of a property sale, which had been remitted to him by the bank.

Mr Carlyle, who has kept the action alive with support from the Scottish Legal Aid Board, confirmed that he was going to continue his fight.

He said: "I have been impressed with the wide-ranging support and legal opinion that I have received, all encouraging me to appeal to the Supreme Court for a final decision."