The Islamic fanatic, 32, launched the £20,000 claim following an incident with prison guards as they tried to restrain him.
He is alleged to have become agitated as five officers led him from his cell in maximum security Belmarsh prison and claims the resulting struggle led to the loss.
But the Ministry of Justice said it thoroughly investigated the 2013 incident and found staff had done nothing wrong.
Wednesday night a spokesman said:
“A police investigation into this incident took place and no charges were brought against members of staff.
“The public will be rightly outraged at the thought of this man receiving compensation from the taxpayer and we robustly defend claims made against the Prison Service.”
Adebolajo, then 29, and Michael Adebowale, 23, were jailed for life in 2014 for hacking to death Drummer Rigby as he walked to his barracks in Woolwich, South East London.
Adebolajo ran down the defenceless 25-year-old before “butchering him” with his accomplice in an attack which shocked the nation.
Both had denied murder because they were “soldiers of Allah” but were found guilty at the Old Bailey.
Adebolajo was taken from Belmarsh in South East London to Frankland, Co Durham last year amid fears he was radicalising inmates.
He had an appeal against his murder conviction thrown out by judges last December.
Source: UK Mirror
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