The council has been ordered to open a website and advertise in the press in an effort to make contact with any relatives who may still have a claim to the graves.
Lambeth's sales drive, together with a wholesale removal of an estimated 20,000 headstones from consecrated ground that it compulsorily purchased in 1966, was carried out without any reference to Southwark Diocese. It was declared 'wholly illegal' by the diocesan Consistory Court in 1994.
Lambeth stopped selling graves in 1994, but claimed at a Consistory Court hearing last week that it still has powers to do so. The chancellor of Southwark, Charles George QC, said his provisional view was that the newly buried bodies constituted trespass, in breach of the original owners' rights.
George Hayward, one of two petitioners whose requests triggered last week's test case, said: 'We have been waiting for three years to erect a memorial to my mother in law. It has been very worrying, and a great deal of effort and expense.'
Last week's decisions could be extended to almost 1,000 other new owners.
In a formal apology to the Friends of West Norwood Cemetery, Lambeth environment chairman Chris Henley wrote: 'I am fully aware that the council's actions have caused distress and concern to relatives of the deceased and wider public.'