Mr Justice Blake is quoted by The Guardian saying that the Ministry of Defence advice to the Home Office on whether to grant settlement to the Gurkhas was confusing, resulting in “irrational and unlawful” restrictions being applied.

The policy needed “urgent revisiting”, he said, setting a deadline of three months. The Home Office, he added, should “take political responsibility for the outcome where it is answerable to the electorate”. He ordered the Home Office to pay 80% of the costs of the case.

The law was “so unclear as to permit conflicting decisions”. It failed to take into account years served, whether injuries were inflicted and whether medals of valour – including the Victoria Cross – were won.

The government argued that since the Gurkhas’ regimental headquarters were in Hong Kong until 1997, the soldiers did not develop close enough ties to the UK.

Hundreds of ex-Gurkhas gathered outside the high court to await the ruling, along with the actor Joanna Lumley, whose father served with the Brigade of Gurkhas for 30 years.

Lumley said the judgment had given the government the “chance to right great wrongs and wipe out a national stain” and encouraged members of the public to support the campaign signing a petition to get the policy rewritten.

Visit http://www.gurkhajustice.org.uk/ to sign the petition