Bangladesh's Supreme Court on Thursday dismissed a final attempt by Nobel-winning microfinance pioneer Muhammad Yunus to overturn an order sacking him from the bank he founded.

Yunus's lawyers lodged a recall request after his appeal was turned down last month in a power struggle with the government for control of Grameen Bank, where he developed the concept of microfinance cash loans to tackle poverty.

"The Supreme Court has dismissed Yunus's final petition," Attorney General Mahbubey Alam told AFP after a short hearing which Yunus did not attend. "After this order, Yunus should not cling to his position any more."

The court ruled that Grameen Bank was a government institution, not a private bank as Yunus and his legal team have maintained, meaning employees must abide by the state's mandatory retirement age of 60.

Yunus, 70, was removed as head of Grameen Bank by the Bangladesh central bank on March 2 but he defied the order, returning to work and lodging a legal case challenging the dismissal.

"It appears this is the end of the legal route," Tamin Husain Shawan, one of his lawyers, told AFP after the hearing.

Yunus and Grameen Bank won the Nobel peace prize in 2006 "for their efforts to create economic and social development from below."

The microfinance model has been copied in developing countries around the world and his sacking was widely criticised by international supporters and the United States government.

"We are very sorry and disappointed by this ruling. It is going to affect Grameen Bank," Jolekha Begum, a Grameen Bank board member, told AFP.

Supporters say Yunus has been victimised by Prime Minister Sheikh Hasina, who he crossed in 2007 when he briefly set up a political party during a period of military rule.

In December, following the release of a Norwegian TV documentary critical of Yunus, Hasina accused him of "sucking blood from the poor" and pulling a financial "trick" to avoid paying tax.

Analysts say Grameen's huge influence in Bangladesh and its move into solar panels, mobile phones and other consumer goods has also triggered the government's envy.