Mr Justice Collins gave permission for a judicial review against a green settlement in Warwickshire that could signal the death knell for Labour's flagship housing policy.

Protesters claimed the whole eco-town process was unlawful, and a hearing is now expected to take place early next year.

The news was welcomed by Selby's Conservative prospective parliamentary candidate Nigel Adams, who said: "I'm pleased the judge granted campaigners in Warwickshire a judicial review, and I'm confident the findings will cast doubt on the legality of the whole eco-town programme.

"I also believe the review will conclude the government's consultation process was both inadequate and deeply flawed."

Plans to create a green scheme of up to 6,000 homes at the former Gascoigne Wood mine near Sherburn were rejected by Leeds City Region councillors in June.

But a fresh consultation on the site could still be launched, while the private sector Willow Green bid in Eggborough remains on the table.

Mr Adams added: "Large scale local planning decisions like this should be left to local authorities with direct accountability to the people who elect them – not on a nod and a wink by Ruth Kelly.

"The government has tried to railroad this through, and is upset people won't just lie down and accept it."

MP John Grogan insisted the review wouldn't affect any potential scheme in Selby. He added: "I've written to Iain Wright MP expressing my view the national shortlist shouldn't now contain a site in the Leeds City Region."

A spokesman for the Department for Communities and Local Government said it would continue with the programme, despite the impending review. He also denied the scheme was unlawful.