Judge Forbes yesterday ruled that English Partnerships had acted unlawfully in its bid to action a Compulsory Purchase Order for 367 homes in the Edge Lane area.
The decision - which will be used as a precedent - leaves the entire Pathfinder initiative in ruins.
These massive schemes were initiated by John Prescott, when the ODPM was still powerful, as a way of superficially forcing up house prices in deprived areas through the wholesale demolition of supposedly rundown homes.
Pathfinder was also painted as a regeneration initiative which would see old terraced homes knocked down and replaced with new, modern housing stock.
However campaigners have long argued that the homes earmarked for demolition were not 'run down' and that communities were being needlessly broken up.
The High Court ruling represents a huge victory for the locals and leaves all nine Pathfinder initiatives in the north of England in big trouble.
Unsurprisingly the long-standing campaigner and architect Elizabeth Pascoe, who took the legal action, was delighted with the ruling.
'This is a pyrrhic victory for me,' she said. 'It is bittersweet because much of my community has already been destroyed as a result of this initiative.
'Many of my neighbours who had lived here happily for decades succumbed so recently to the pressures of empty properties surrounding them that my battle was merely a formality - the bulldozers were ready.
'In the High Court I was doing what I did for my community which this long-standing acquisition process has now destroyed. There will be much heartache among those who will now find that they gave in to the pressures.
'All is not totally lost because I was also doing it for many others now and in the future nationwide. Hopefully we can truly regenerate what remains and attract the dispossessed.
'My hope is that we may in the next 12 months achieve a Jan Gehl-style effort - a humane approach, as has been done in London and cities in other countries and continents - with almost every dwelling carefully refurbished up to the highest green standards,' she added.