The independence of the highest court in the land cannot be properly guaranteed because of the way it is funded, its president has said.
Lord Phillips also warned there is a tendency on the part of the Ministry of Justice (MoJ) to try to gain the Supreme Court "as an outlying part of its empire".
The way in which the court is dependent each year on what it can persuade the ministry to give it "by way of contribution" was "not a satisfactory situation", he said.
The top judge also raised concerns over whether senior court staff owed their loyalty to him or to ministers. It is "critical" for the court's independence that its chief executive, Jenny Rowe, "owes her primary loyalty to me and not to the minister", he said, adding that Ms Rowe backed his view. But he warned of an impression that there are those within the ministry "who do not appreciate this".
The Supreme Court, which replaced the Law Lords, was set up in 2009 to emphasise the separation of powers between Parliament and judges.
But, in a speech at the launch of a research project on the politics of judicial independence at the University College London (UCL) constitution unit on Tuesday night, Lord Phillips said that independence was threatened by the court's funding arrangements.
"My conclusion is that our present funding arrangements do not satisfactorily guarantee our institutional independence," he said. "We are, in reality, dependent each year upon what we can persuade the Ministry of Justice of England and Wales to give us by way of 'contribution'.
"This is not a satisfactory situation for the Supreme Court of the United Kingdom. It is already leading to a tendency on the part of the Ministry of Justice to try to gain the Supreme Court as an outlying part of its empire."
Justice Secretary Ken Clarke denied any threat to the court's independence and insisted he could not give it a blank cheque at a time when he was slashing budgets in other services such as prisons.
"Inevitably he is going to be subject to the same public expenditure negotiations as everybody else. The independence of the court is absolutely secure but it doesn't extend to telling me how much public money they are going to spend without question. And his chief executive is a civil servant. That does not compromise his judicial independence at all, I am afraid, in my opinion," he told the BBC Radio 4 Today programme.