The decision to downgrade services at Lewisham Hospital has been quashed in the High Court.

Mr Justice Silber this morning ruled the special administrator appointed to neighbouring South London Healthcare Trust had acted outside his powers in making recommendations that would affect Lewisham.

Health secretary Jeremy Hunt in January approved the decision of special administrator Matthew Kershaw that South London Healthcare Trust be dissolved and one of its hospitals be merged with Lewisham, which would then lose some services.

Former health secretary Andrew Lansley invoked the powers of the 2006 Health Act in June to put South London into administration.

When Mr Hunt approved the special administrator’s recommendation, Lewisham Council and a campaign group issued a legal challenge.

Quashing Mr Hunt’s decision, Mr Justice Silber said in his judgment: “The trust special administrator did not have vires [authority under the legislation] to make his recommendations relating to Lewisham Hospital.

“The secretary of state did not have the vires to make his decision relating to Lewisham Hospital.”

Justice Silber said the claimants’ complaint that the proposal did not meet Mr Lansley’s “four tests” on hospital reconfiguration also succeeded.

The council and campaigners said the opposition from Lewisham Clinical Commissioning Group meant the plans failed Mr Lansley’s stipulation that significant changes to services should have “support from GP commissioners”.

The Department of Health has sought leave to appeal today’s decision and Justice Silber approved leave to do this.

One senior source said the decision could inhibit other hospital reconfiguration schemes. The failure regime legislation had also been mooted at Mid Yorkshire Hospitals Trust.

The source said the main problem came from a lack of clarity in the 2006 law over whether the special administrator could make recommendations affecting trusts that were not themselves in the failure regime.

But they added Mr Hunt had been free to drop Mr Lansley’s “four tests”, which were an obvious obstacle to the plans.

The British Medical Association said there should be an “urgent review” into how the secretary of state came to breach his statutory powers.