In a ruling which the judge acknowledged was of 'great importance' to councils nationwide, Mr Justice Keene ruled East Sussex CC had not been entitled to take into account the scarcity of its resources when deciding what was or was not a 'suitable education' for Beth Tandy.
The cut back in Beth's home tuition from five to three hours each week had been 'effectively dictated' by a£3m shortfall in the county council's central government funding, said the judge.
But the council had made no alternative provision to make up for the loss of two hours-a-week home tuition and the judge ruled: 'The council cannot on financial grounds provide something which falls short of a suitable education.'
The council's manager of pupil services, Bernadine Bacon, had proceeded on 'an erroneous basis', misunderstanding the 'emphatic' words of a top ME specialist that Beth was in September last year too sick to be re-integrated into school and had difficulty even leaving the house.
'It is difficult to see how the figure of three hours was arrived at. There has been no explanation for it. I am satisfied that the decision was irrational and not a proper exercise of the powers conferred upon the council,' the judge said.
The council's decision to cut Beth's home tuition in September last year was overturned by the judge and her case must now be urgently reconsidered.
The judge ackowledged that Beth's case had raised an 'important point of law of widespread interest,' and granted the council leave to appeal against his decision.
The local authority was ordered to pay the action's legal costs which are certain to run into several thousand pounds.
Beth, whose case was brought to court by her mother Hilary, is dyslexic, and was diagnosed as suffering from ME in 1990. She suffers extreme tiredness, headaches and muscular pains making it impossible for her to cope with the noise and bustle of school life.
The youngster attended her primary school only rarely and, between the autumn term of 1993 and the spring of 1995, although on the roll of the Priory School, 'barely attended' because of a series of viral infections.
She has not been to school since and, with GCSE exams approaching, depends entirely on home tuition, the court heard.
Beth's mother said the cut in her home tuition had been 'effectively dictated' by budgetary constraints, and the judge said: 'There is no doubt financial considerations were taken into account by the local education authority.'
While 'not wholly irrelevant', the judge ruled the council's funding problems could not be taken into account when deciding what was and was not a 'suitable education' for Beth under the terms of the 1993 EducationAct.
The council was not precluded from providing for Beth's needs as cheaply as possible, but the education provided had to be 'suitable'.
'The reality is that no alternative arrangements were being provided to make up for the loss of two hours-a-week home tuition.
'The council took into account an irrelevant consideration when determining what was a suitable education for Beth and on that basis this decision cannot stand.'
'This particular decision was arrived at in such a way as to be properly described as irrational. The basis of the decision was not a rational one.
'I am satisfied that the decision was irrational and not a proper exercise of the powers conferred on the local authority,' the judge ruled.
He overturned the council's decision to cut the number of Beth's home tuition hours, but granted the council leave to appeal against his decision, saying the case had raised 'an important point of law of widespread interest.'
Sharon Etienne, the solicitor acting for the Tandy family, said: 'Families up and down the country will be heaving a sigh of relief.'
Kirsteen Tait, director of the National Association of the Education of Sick Children, said: 'I'm absolutely delighted on behalf of the Tandy family and Beth.
'I am also extremely pleased for sick children in hospital and at home across the country because there are so many local authorities basing decisions on financial resources and not on the individual needs of the children as required under the 1993 Education Act.'