The Government's HS2 high-speed rail scheme suffered a setback when the High Court ruled that the consultation process for compensating those affected by the multibillion-pound project "was so unfair as to be unlawful".
But the Government immediately announced that "a re-run property compensation consultation will not affect the HS2 construction timetable in any way".
The decision on compensation at London's High Court by Mr Justice Ouseley was a victory for the High Speed 2 Action Alliance (HS2AA), consisting of more than 70 affiliated action groups and residents' associations.
The HS2AA case on consultation was one of five separate cases brought to block the controversial scheme in its current form. It was the only one to succeed.
The Government greeted the overall outcome of the crucial legal battle as a victory and said: "Work on a new high-speed railway from London to Birmingham, Manchester and Leeds can continue."
The first phase of HS2 would see a high-speed line running through Tory heartlands from London to Birmingham. A second phase extends the line to Leeds and Manchester to create what will become known as "the Y network". The project is designed to cut journey times, ease overcrowding and boost regional business.
The Government hailed the court's dismissal of four of the five cases against it as a "landmark victory".
Rail Minister Simon Burns said: "This is a major landmark victory for HS2 and the future of Britain. The judge has categorically given the green light for the Government to press ahead without delay in building a high-speed railway from London to Birmingham, Manchester and Leeds.
""HS2 is the most significant infrastructure investment the UK has seen in modern times and a project the country cannot afford to do without. The judgment ensures that nothing now stands in the way of taking our plans to Parliament.
"We will now move forward as planned with the crucial business of getting the scheme ready for construction in 2017 and delivering enormous benefits for the country. We have listened to the judge's comments about the property compensation consultation and, to save time and public money, we will re-consult on this aspect - but this will not delay HS2. We remain fully committed to fairly compensating the public who are impacted by the scheme."
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