Top planning judge Mr Justice Sullivan has quashed parts of the Milton Keynes and South Midlands Sub Regional Strategy, published last March by the Office of the Deputy Prime Minister.
The ODPM acknowledged the error during a high court hearing last week but lawyers contested the challenge on the basis that quashing parts of the strategy would result in a 'policy gap' for the area while a replacement strategy was produced.
However, the judge has ruled that, if the incorrect part were not quashed, it could be wrongly followed by the local council in planning decisions. The judge said it was open to deputy prime minister John Prescott to fill any gap by issuing a ministerial statement if he thinks it appropriate.
Earlier reports contemplated a 1,500-house development on a site near Northampton known as Buckton Fields or Whitehills, in which Ensign had an option to invest.
However, in the Milton Keynes and South Midlands sub-regional strategy, Mr Prescott misinterpreted a panel report conclusion that a further 1,500 houses should be provided in Daventry town centre. He thought it meant that those houses should replace the Buckton Fields allocation.
In a statement made following the ruling, the ODPM's legal counsel said: 'It has, at all times, been the first secretary of state's position that the panel's recommendations represent the most appropriate basis for the preparation of local development documents by the relevant planning authorities.
'It was not the first secretary of state's intention to change the housing number in the Northampton implementation area in a way that did not accord with the panel's intention.'
According to papers before the court, no development has yet taken place, and any proposals have yet to receive planning permission.
STRAND NEWS SERVICE