The Government insists its HS2 high-speed rail project has not hit the buffers after a High Court judge ruled the consultation process for compensating those affected was "unlawful".
It was the only successful case among five in which Mr Justice Ouseley had been asked to send the multi-billion pound project back for reconsideration.
Despite the decision at London's High Court, Transport Minister Simon Burns insisted the scheme would not be held up.
"This has been a convincing victory for the Government," he said.
"It's a green light to go ahead. It will not hold up us going ahead with the project, which is in the national interest."
"This is a major landmark victory for HS2 and the future of Britain.
"HS2 is the most significant infrastructure investment the UK has seen in modern times and a project the country cannot afford to do without.
"The judgment ensures that nothing now stands in the way of taking our plans to Parliament.
The scheme has provoked angry opposition "We will now move forward as planned with the crucial business of getting the scheme ready for construction in 2017 and delivering enormous benefits for the country."
The decision on compensation was a victory for the High Speed 2 Action Alliance (HS2AA), consisting of more than 70 affiliated action groups and residents' associations.
Human rights lawyer Richard Stein, who helped represent HS2AA, said: "This was never a Nimby argument. Many thousands of people living along the route will not be able to sell their homes for some 15 years because their homes are blighted.
"They should not have to bear the burden for this national project.
"We hope now that proper arrangements are put in place by the Government for compensation for those who live by the proposed HS2 route to make it possible for them to move if and when they wish, in the same way that the rest of us can."
The first phase of HS2 would see a high-speed railway line running through Tory heartlands from London to Birmingham.
Shadow transport secretary Maria Eagle said: "We've now had nearly three years of dither and delay over HS2 which must now come to an end.
"It is vital that the Government now gets on with introducing the necessary legislation to make this scheme a reality on the ground. When they do so, they will have cross-party support from Labour."
Supporters point to the benefits of a reduction in journey times between the UK's two biggest cities.
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