Gleeson has lost its High Court bid for compensation from the government over its handling of plans for homes in Malmesbury.

It means that, after months of controversy, the planning application for 180 homes and space for a school will come back under the jurisdiction of the Secretary of State, Eric Pickles.

Judge Mr Justice Cranston ruled in favour of the government on Monday after a High Court battle this month, in which Gleeson was suing for compensation after an ‘administrative error’ on March 18 this year caused a decision by a planning inspector to approve the plans to be overruled at the 11th hour.

Town and Wiltshire councillor Simon Killane has been campaigning to delay a decision on the site until the completion of the town’s neighbourhood plan, which decides where developments should go.

He said: “This is great news. It has huge implications as this case stood for the legitimacy of the neighbourhood planning process.

“If it hadn’t gone our way it would have killed neighbourhood planning dead.”

Gleeson Developments Limited was initially granted outline planning permission for the huge development in Malmesbury.

But it turned out that, less than three hours before Gleeson was given the good news, Planning Minister Nick Boles had decided to ‘call in’ the company’s application for personal determination by Communities Secretary Eric Pickles.

The decision was withdrawn and developers took the case to the High Court, saying their human rights had been violated.