The government will have to reconsult on compensation for people who live along the route of the proposed HS2 after a High Court judge ruled in favour of an anti-HS2 protest group.
The HS2AA group financed the case after appealing to the community for help.
Mr. Justice Ouseley upheld the challenge to the government's proposed compensation scheme on the grounds its consultation process was so unfair as to be unlawful .
Four other challenges to the Secretary of State were rejected. Joe Rukin from HS2AA said he was happy that one of the group's claims was upheld, but that HS2 would still be a disaster for many in the Midlands.
HS2 Ltd told ITV News Central, they are delighted with the overall outcome and HS2 is now on track bringing a boost to the region's economy with a super fast link from Birmingham to London. It will cost £33bn.
The Government hailed the court's dismissal of four of the five cases against it as a "landmark victory".
Rail Minister Simon Burns said: "We have listened to the judge's comments about the property compensation consultation and, to save time and public money, we will re-consult on this aspect - but this will not delay HS2.
We remain fully committed to fairly compensating the public who are impacted by the scheme."
The government has said it will not appeal today's ruling after the High Court said the compensation process for those affected by HS2 was "unlawful".
The Government hailed the court's decision on the cases it won as a "landmark victory" and said the loss on the compensation case would "not affect the HS2 construction timetable in any way".
Rail Minister Simon Burns said: "This is a major landmark victory for HS2 and the future of Britain. The judge has categorically given the green light for the Government to press ahead without delay in building a high-speed railway from London to Birmingham, Manchester and Leeds."
The Government's HS2 high-speed rail scheme suffered a setback today when the High Court ruled that the consultation process for compensating those affected by the multibillion-pound project "was so unfair as to be unlawful".
The decision was a victory for the High Speed 2 Action Alliance (HS2AA), consisting of more than 70 affiliated action groups and residents' associations.
The HS2AA case on consultation was one of five separate cases brought to block the controversial scheme in its current form. It was the only case to succeed.
Mr Justice Ouseley, sitting at London's High Court, is now hearing submissions from lawyers on the appropriate remedy.
The first phase of HS2 would see a high-speed line running from London to Birmingham. A second phase extends the line to Leeds and Manchester to create what will become known as "the Y network".
The project is designed to cut journey times, ease overcrowding and boost regional business.
Government consultations on HS2 have just been ruled unlawful by the High Court.
Campaigners against the High Speed 2 rail link say a building society has officially valued a house near the route as worthless.
The property in the village of Turweston, in Buckinghamshire, is around 450 metres from the proposed HS2 line. Mike Pearse has been speaking to Mike Harper-Tarr, the owner's son and David Babister, who's looking to buy.