Mr Justice Gloster said the council's bid for a 'Draconian' High Court injunction stopping flights from the terminal and forcing its demolition within 28 days was a 'wholly inappropriate' abuse of court process.
She said the council may also have 'real difficulty' in proving that the terminal was in fact built in breach of planning control or that any such breaches were 'substantial and non-technical'.
The judge's ruling was a stunning victory for Thomsonfly and the airport's operators - West Midlands International Airport Ltd - who say they would have been faced with losses of up to£2m-a-week had the injunction been granted.
Thomsonfly, which only began operating out of the terminal on 31 March, said it could have been forced out of business, with the loss of 217 newly-created jobs. 150,000 passengers who have bought tickets would also have had to be refunded.
The council argued, amongst other things, that the terminal building exceeded the 500 square metre permitted maximum and planning consent should have been obtained.
But WMIA insists there has been no breach of planning control and that issue will now be thrashed out by a government planning inspector at a six-week public inquiry in October.
WMIA says it is hopeful the inspector will overturn enforcement notices issued by the council requiring the cessation of flights from the terminal and its speedy demolition.
Mrs Justice Gloster's ruling leaves it open to the council to issue a 'Stop Notice' against WMIA under planning laws which would effectively close down the te rminal on pain of criminal sanctions.
But if the council takes that step, and the Stop Notice later turns out to have been wrongly issued, it will have to pay compensation which could run into many millions of pounds.
Mrs Justice Gloster said Warwick DC's injunction bid was 'wholly inappropriate to the circumstances of this case, such as to amount to an abuse of the process of the court'.
The council, she said, could have issued a 'Stop Notice' under planning laws shutting the terminal down and WMIA had promised in court that they would abide by such an order which carries criminal sanctions.
She said the council's 'reluctance' to issue a 'Stop Notice' appeared in part to be motivated by its unwillingness to pay compensation if it later turned out to have been wrongly issued.
The council had knocked back WMIA's requests for independent mediation of the planning issues in the case.
'It might appear to the cynical minded,' said the judge, that part of the council's motive in keeping the injunction proceedings on foot was the knowledge that publicity surrounding the case would damage Thomsonfly's goodwill and make passengers reluctant to book tickets.
That, she observed, might provide 'a cogent incentive' for WMIA and the airline to come to the negotating table and settle the dispute.
Rather than following the standard route of taking enforcement action against alleged breaches of planning control, the council had come to court in a bid for a 'Draconian and coercive' injunction, she added.
Such injunctions are only normally granted in extreme cases where breaches of planning control are irreversible or 'flagrant' - and the judge said there was no evidence of any such thing in this case.
WMIA h ad argued that the council's 'apparently deliberate decision' not to issue a Stop Notice was an attempt to 'subvert' the planning process, limiting WMIA's rights of appeal and doing away with the threat of having to pay compensation that could run into millions.
Observing that the planning inspector would be better placed to resolve the disputed facts at the public inquiry in October, the judge said: 'It is not for the court to usurp the function of the planning authorities.'
The council's full injunction application would not have been heard until October - at the same time as the public inquiry - and the judge said it was 'difficult to envisage what possible utility' would be served by both sets of proceedings going on in tandem.
It was, she added, 'abundantly clear' that WMIA - owned by giant travel group TUI (Northern Europe) Ltd - would comply with any enforcement action taken by the council.
Mrs Justice Gloster described as 'highly unattractive' the council's plea that, despite the 'absolute terms' of the injunction sought, it would in fact allow the terminal to continue operating, subject to conditions.
Warwick had put forward no details of the conditions that it would like to impose, she told the court.
WMIA hotly disputes council claims that the terminal exceeds 500 square metres in size - the maximum allowed by law before planning permission is required.
And, although ultimately an issue for the inspector to decide, Mrs Justice Gloster said the council may have 'real difficulty' in proving breaches of planning control or that they are 'substantial and non-technical'.
The judge also accepted WMIA's argument that there had been 'inexcusable and inordinate delay' in the council seeking the injunction.
Warwick only resolved to go to the High Court on 31 March - the very day that Thomsonfly began operating from the terminal - and after many millions of pounds had been invested in the project, the court heard.
As well as having its injuncti on application 'struck out' by the judge, Warwick District Council now faces heavy legal costs bills.
STRAND NEWS SERVICE