The Brookfield House hostel has caused a wave of local controversy since it was converted from an old people's home to a residential care centre for homeless men last year.
The centre has since been 95% full, and its managers insist that residents are not simply 'taken off the street' but must undergo rigorous selection procedures before admission.
But Knowsley MBC refused planning permission for the change of use and issued an enforcement notice against the hostel's managers in June last year.
But yesterday, after a brief hearing in London's high court, Judge Gerald Moriarty QC threw Brookfield House a lifeline when he granted leave to appeal against the inspector's decision.
No date has been set for the hearing of the planning appeal which will be before a deputy high court judge.
The planning inspector observed in August this year that he had 'heard enough evidence to convince me that the change of use of the Brookfield hostel for the homeless was contributing significantly to the amount of crime and drink-related bad behaviour in the Huyton town centre'.
He concluded that if the hostel were allowed to remain open it could 'undermine the policies of the council to regenerate the town centre'.
The hostel's managers say there was not enough evidence to justify the inspector's conclusions.