It is still against the law for prostitutes in Ontario to work in brothels and openly solicit customers.
Ontario Court of Appeal Judge Marc Rosenberg extended a stay of proceedings imposed when a Toronto judge decriminalized prostitution in September.
Thursday's decision extends the stay until April 29, putting pressure on the government to expedite the appeal of Ontario Superior Court Judge Susan Himel's decision.
Mr. Justice Rosenberg said that, while he found some of the government's arguments, "less than compelling," he was reluctant to leave a sudden regulatory void in the prostitution laws.
However, the public benefit that might be realized if the stay were lifted was not sufficient to justify changing the status quo.
Terri-Jean Bedford, a sex trade worker who helped launch the challenge, expressed disappointment about the ruling. However, she aimed her anger at the federal government and Prime Minister Stephen Harper.
"The prime minister is hiding behind the courts," she said. "He should come out and fight like a man. His silence means that he is not concerned about the violence against women.
"The only people who benefit from this law right now are tax evaders and organized crime."
York University law professor Alan Young said that Judge Rosenberg was placed in a very difficult decision without being able to examine all of the evidence that led to the laws being struck down.
"Its business as usual for the government, which means a bad law will continue to be under-enforced," Prof. Young said.
Nikki Thomas, a spokesman for Sex Professionals of Canada, said that sex workers "are not waiting around so that they can run into schoolyards and start leaving condoms under monkey bars ... This is about human rights and our ability to look after ourselves, our partners and our children. You won't see a huge explosion of sex workers in the streets."
Prostitutes were divided on Judge Himel's decriminalization decision. Some applauded it as a move toward ending the constant jeopardy that many of them face in their trade. Others feared being caught in red tape as they deal with health inspectors, tax collectors and licensing officials as a result of decriminalization.
Opponents had warned lifting the stay would see street prostitutes descend on residential neighbourhoods and allow pimps to operate freely.
In her ruling Judge Himel suggested chaos would not reign in the streets in the event of decriminalization, since other Criminal Code provisions would permit authorities to control violent pimps or prostitutes who become a nuisance.