A decision by Communities Secretary Eric Pickles to scrap regional housing targets was ruled unlawful by the High Court today.
Housing developer Cala Homes (South) Ltd which wants to build hundreds of new homes in Hampshire argued that Mr Pickles was wrongly seeking to revoke regional planning strategies through discretionary powers.
Today Mr Justice Sales, sitting in London, ruled that the Cala Homes argument was ''well founded''.
Planning lawyers say today's ruling could have a crucial impact on housing and development projects across England.
But Communities and Local Government minister Bob Neill said: ''This judgment changes very little.
''Later this month we will be introducing the Localism Bill to Parliament, which will sweep away the controversial regional strategies. ''
Allowing Cala's legal challenge, Mr Justice Sales said its arguments were ''well founded''.
Government sources indicated that there would be no appeal against the judge's ruling as it would not be a prudent use of taxpayers' cash.
The development would fulfil a ''crucial part'' of the Regional Spatial Strategy for the South East of England.
Mr Pickles' decision was ''highly prejudicial'' as it meant the Winchester appeal would have to be determined against a new background, consisting only of the local development plan documents for that area.
Barton Farm has been reported as the Scottish developer's largest project in England, but local councillors have twice blocked the scheme.
The developers hope success in the High Court against Mr Pickles, and the restoration of housing targets, could swing the local appeal in their favour.
Winchester council was told by the previous government to build 12,000 homes in its area by 2026.
It was estimated that Barton Farm could provide a site for 2,000 houses before Mr Pickles scrapped the Winchester target.
Cala Homes asked for a postponement of its local appeal until after the outcome of today's High Court action.