Education secretary Michael Gove acted unlawfully in how he scrapped the Building Schools for the Future programme, the High Court has ruled.
Mr Gove abandoned the £55 billion BSF programme in July 2010, only allowing projects that had reached financial close to go ahead, along with follow-up projects that had secured outline business case approval after 1 January 2010.
But the judge said Mr Gove should have consulted all councils that had OBC approvals regardless of the date they were granted.
Mr Justice Holman said: “The way in which the secretary of state abruptly stopped projects to which OBC approval had already been given without prior consultation with the five claimants must be characterised as being so unfair as to amount as an abuse of power.”
The judge also found that Mr Gove unlawfully failed to give due regard to the equality impacts of his proposed decision.
The government must now reconsider its decision relating to the six councils that brought claims to the High Court.
Six contractors may benefit from the High Court ruling that the government acted unlawfully in the way it stopped the scheme.
The six BSF contractors are Bouygues, for the London Borough of Waltham Forest, which has a contract for £258m; Kier for a £255m deal with Kent County Council; Laing O’Rourke, for the London Borough of Newham and a £230m contract; Interserve for a £128m contract with Sandwell Metropolitan Borough; Carillion in a contract of up to £96m with Nottingham City Council; and Wates for a £48m deal with Luton Borough Council.