Hundreds of other similar cases had been awaiting new guidelines from Lord Justice Laws, sitting with Lord Justice Carnwath and Lord Justice Jacob, who decided against the home secretary in a 2-1 majority decision.
The ruling came as a blow to the government, with a Home Office spokesman saying: 'We are disappointed that the appeals have been dismissed by a split decision of 2-1.'
The judges gave Mr Blunkett permission to appeal further to the House of Lords, the country's highest court.
Under the 2002 Nationality, Immigration and Asylum Act, would-be refugees are obliged to make their asylum claims at their port of entry, or as soon as reasonably practicable, or face being denied state help with food and shelter.
But Article 3 of the European Convention on Human Rights states that no one should be subjected to 'inhuman or degrading treatment'.
Both Lord Justice Carnwath and Lord Justice Jacob ruled that in all three test cases the refusal to give support had crossed the Article 3 threshold.
Lord Justice Laws disagreed and said he would have allowed the home secretary's appeals.
Later, the homeless charity Shelter expressed its 'delight' with the 'groundbreaking' Appeal Court decision that 'shelter of some form from the elements at night is a basic amenity.'
The charity said the guidelines set down mean that 'asylum seekers and other destitute people who are not currently given state assistance may, for the first time, have a case for claiming t hat their human rights have been breached on the grounds of homelessness'.
Shelter's director Adam Sampson said: 'This judgment is a victory for very vulnerable people who are in desperate need with nowhere to turn.
'Section 55 (of the 2002 Act) is threatening to greatly increase the number of homeless people on the streets - undermining the government's own successes in tackling rough sleeping.
'We hope that it will now not only implement the court's guidance but also undertake a thorough review of Section 55 called for by the home affairs select committee.'
The Home Office said that the 'basic thrust' of the Section 55 policy, that asylum seekers could be refused support if they failed to claim asylum as soon as was reasonably practicable, had been vindicated by the courts.
But the Appeal Court had been asked to give guidance on when refusals threatened applicants' Article 3 rights.
The Home Office spokesman said: 'This guidance has proved difficult. The Court of Appeal itself is divided as to the correct approach, as the High Court was before it.
'In his minority judgment, Lord Justice Laws points out that the relevant principles in this area are 'more than usually elusive'.'
Announcing the intention to take the case to the House of Lords, the Home Office said the issues raised were 'of great public importance and real legal complexity'.
'We are considering the full implications of the court's decision and examining the options for the future.'
The first of the three test cases before the court today involved Wayoka Limbuela,
an Angolan who celebrated his 24th birthday yesterday.
He maintained that he arrived in the UK on 2 May last year and claimed asylum the
He was provided with accommodation in Margate, Kent, by the National Asylum Support Service, but nine days later the Home Office immigration authorities decided that he had failed to make a prompt application for asylum.
On 22 July he was evict ed from NASS accommodation and spent two nights sleeping rough outside Croydon police station.
He claimed in that time he had no money, food, shelter or access to toilet facilities and was afraid for his personal safety.
Mr Limbuela also said he asked the police for a blanket but that was not provided. He begged for food from passers-by but was not given anything.
He found refuge at a night shelter for four nights, and then a High Court judge ordered that he be accommodated pending his legal challenge to his treatment.
Mr Limbuela said he had been provided with medication for a stomach condition, which he had to take three times a day before meals. Lack of food meant he could not take the medication.
He still has an outstanding appeal against the Home Secretary's decision to refuse him asylum.
High Court judge Mr Justice Collins recently ruled that his Article 3 rights had been breached, saying he found it 'distasteful' to adopt a 'wait and see' policy by removing an asylum seeker's support to be sure he suffered before he was offered support.
In the second case, Binyam Tefera Tesema arrived from Ethiopia in
August last year and was refused accommodation on the basis that he had made his claim late.
He complained of earache, backache and pain in the left knee and feet and said it was due to having been beaten, but the Home Office authorities said he had not provided evidence of a medical condition to justify giving him state support.
He was evicted from NASS accommodation on 2 September, but on the same day had applied to the High Court for interim support so did not have to sleep rough at any time.
His asylum claim was rejected by the Home Secretary last August, but his appeal to an independent adjudicator was allowed in January this year. The home secretary is currently appealing against that decision.
In the third case, Sudanese Yusif Adam slept rough in a car park after being denied support. H e won a High Court ruling that his treatment had become 'inhuman and degrading'.
He said he had arrived in the UK clandestinely on a cargo ship from Port Sudan on 15 October last year.
The agent accompanying him bought him a bus ticket to travel to London, where he made his asylum claim the day after his arrival.
The High Court ruled that his Article 3 rights had been breached because of his deteriorating condition after a month of sleeping rough.
Mr Adam, who is illiterate and Arabic speaking, said in a statement that he had been given a sleeping bag by the Refugee Council, and the only clothing he possessed was a sweatshirt, t-shirt and jacket, and he was getting cold and wet when it rained.
He was existing on money given to him by his solicitor, felt humiliated living in the car park near the Refugee Council premises in Brixton, south London, and his health was deteriorating.
Dismissing the home secretary's appeal, Lord Justice Carnwath said the question raised by the three appeals, in its starkest form, was 'to what level of abject destitution individuals must sink before their suffering or humiliation reached the 'minimum level of severity' to amount to inhuman or degrading treatment under Article 3.'
There were some 666 cases now before the courts, with about two new cases per day. In all of these, the applicants had been offered interim support pending the outcome of the legal challenges.
Condemning the 'wait and see' approach of the government, the judge said this would lead to a legal adviser having to say to a destitute asylum seeker sleeping on the streets: 'You are not ill enough. Go away and come back when you are r eally suffering.'
He ruled it was not necessary to show the onset of severe illness or suffering in order to qualify for accommodation.
If the evidence showed charitable support was not available, and people had no other means of fending for themselves, 'then the presumption will be that severe suffering will imminently follow.'
Lord Justice Jacob agreed. He described the test the government was applying, based on the 'degree of severity' of suffering an applicant had to be 'verging on' before becoming entitled to support, as 'abhorrent, illogical and very expensive'.
When it came to charitable shelter, the evidence indicated there was virtually no spare capacity, and the position was not much better with charitable food.
If more than 600 people were put on the streets without money or the entitlement, because they were asylum seekers, to earn any, there was 'a near certainty' that a substantial proportion would fall below the Article 3 threshold.
Some might resort to theft, prostitution or illegal working - very likely for so-called gangmasters - but the state could not take advantage of that, nor did it seek to do so, said the judge.
'It seems to me that it must follow that the current policy, which includes having no policy save in the case of heavily pregnant women, is unlawful as violating Article 3,' said the judge.
It followed that the treatment of the three indidividuals in the test cases was also unlawful.
In his dissenting judgment, Lord Justice Laws said: 'I fear that the law in this area has got into serious difficulty.'
High Court judges had 'felt driven to take starkly contrasting positions' on the right test to be applied for deciding whether a destitute person's human rights were in danger of being breached by a failure to offer state support.
Lord Justice Laws said: 'We are left with a state of affairs in which our public law courts are driven to make decisions whose dependence on legal principle is at best fragile, leav ing uncomfortable scope for the social and moral preconceptions of the individual judge.'
He stressed he meant no offence 'to the distinguished judges who have heard these cases'.
But Article 3 would not be violated if a claimant were to be put on the street - provided there were no 'special considerations', such as age, infirmity or any other special vulnerability.
None of the three cases before the court exhibited such exceptional features.
Article 3 was meant to be applied as 'the law's last word' and operate as a safety net 'confining the state's freedom of action only in exceptional or extreme cases.'
Disagreeing with Mr Justice Collins's criticism of the 'wait and see' approach, in which asylum seekers were not aided unless their condition markedly deteriorated, Lord Justice Laws said: 'We are fixed with the 'wait and see' approach. It is a function of the legislation.
'The courts cannot widen the scope of Article 3 to avoid it.'
Lord Justice Laws warned it was not for the judiciary to 'don the mantle of the statute's practical administrators... to save section 55 from excoriation in the moral and political arena'.
He added: 'In particular, we cannot strain and extend the obligations of the UK under Article 3 beyond what, judicially, we conceive to be their proper limits.'
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