U.S. President Barack Obama says his administration will help formulate "a forceful response" to a Supreme Court ruling that lifts some limits on corporate spending on political campaigns in support of candidates for president and Congress.

U.S. President Barack Obama has said his administration will work with Congress to come up with 'a forceful response' to a Supreme Court decision that removes some limits on corporate spending on political campaigns. (Canadian Press)The 5-4 ruling eases decades-old limits on corporations' participation in federal campaigns. But it also gives "a green light to a new stampede of special interest in our politics," Obama said in a written statement.

"This ruling gives the special interests and their lobbyists even more power in Washington while undermining the influence of average Americans who make small contributions to support their preferred candidates," he said.

Obama said his office would work with members of Congress on the issue.

He called the ruling "a major victory" for companies in the oil and health insurance sectors, banks on Wall Street and "other powerful interests that marshal their power every day with Washington to drown out the voices of everyday Americans."

Limits were 'censorship'

Thursday's ruling overturns a 20-year-old decision that said corporations can be prohibited from using money from their general treasuries to pay for campaign ads.

The decision, which almost certainly will also allow labour unions to participate more freely in campaigns, threatens similar limits imposed by 24 states.

'The ... ruling threatens to undermine the integrity of elected institutions.'—Justice John Paul Stevens, dissenter

It leaves in place a prohibition on direct contributions to candidates from corporations and unions.

Critics of the stricter limits have argued that they amount to an unconstitutional restraint of free speech, and the court majority apparently agreed.

"The censorship we now confront is vast in its reach," Justice Anthony Kennedy said in his majority opinion, joined by his four more conservative colleagues.

However, Justice John Paul Stevens, dissenting from the main holding, said, "The court's ruling threatens to undermine the integrity of elected institutions around the nation."

Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor agreed with Stevens's dissent, parts of which he read aloud in the courtroom.

Restrictions on last-minute ads struck down

The justices also struck down part of the landmark McCain-Feingold campaign finance bill that barred union- and corporate-paid ads in the closing days of election campaigns.

Advocates of strong campaign finance regulations have predicted that a court ruling against the limits would lead to a flood of corporate and union money in federal campaigns as early as this year's mid-term congressional elections.

The decision, written by Justice Anthony Kennedy, removes limits on independent expenditures that are not co-ordinated with candidates' campaigns.

The case also does not affect political action committees (PACs), which mushroomed after new laws implemented in the wake of the Watergate scandal set the first limits on contributions by individuals to candidates.

Corporations, unions and others may create PACs to contribute directly to candidates, but they must be funded with voluntary contributions from employees, members and other individuals, not by corporate or union treasuries.

With files from The Associated Press