Two severely disabled adults have won a "landmark" High Court battle over cost cutting by their local authority.
A judge ruled today that Isle of Wight Council's plans to reduce its adult social care budget were unlawful.
Mrs Justice Lang, sitting in London, announced: "The defendant (council's) decision on 8 and 23 February 2011 to adopt new community care eligibility criteria are quashed."
Unless there is a successful appeal, the authority will now have to think again.
Lawyers for the two claimants, referred to as JM and NT, said the ruling sends "a very clear message" to all councils in England and Wales seeking to make similar cuts.
The judge ruled the council had failed to comply with its own internal guidance on its new policy for assessing eligibility for adult social care.
A consultation document also "provided insufficient information" to enable those consulted on the criteria changes "to give intelligent consideration and an intelligent response," said the judge.
The ruling is the second High Court judgment this week to deal a blow to local councils anxious to save money in the wake of Government spending restrictions.
On Wednesday a different judge struck down a decision by Sefton Council on Merseyside to freeze care home fees for the second year running and ordered the authority to carry out further consultation.
Lawyer Alex Rook, of Irwin Mitchell, who represented JM and NT, described the Isle of Wight decision as a landmark judgment which would "provide clarity for the thousands of disabled people on the island who stood to lose all or part of their social care packages under the proposed changes".
The ruling would prevent the council "from cutting services to some of the most vulnerable disabled people" and would provide "comfort and peace of mind" to thousands of residents.
Mr Rook said: "This landmark victory sends out a very clear message to all councils in England and Wales.
"If a council seeks to make cuts to its budget for adult social care, it cannot do so by only meeting certain needs designed to keep someone safe, but neglecting their overall quality of life.
"The judgment also makes it very clear that if a thorough and full consultation process is not carried out when considering proposed cuts to services to disabled adults, thecourts will quash the policy."
The first claimant, JM, aged 32, has severe autism and a brain injury suffered at birth.
The court heard that he lives with his retired parents, who devote themselves to his care, and he struggles to communicate with anyone else. He needs support with all areas of his life throughout the day.
The second claimant, 31-year-old NT, also has autism and a learning difficulty. He is currently living in residential accommodation provided by the council during the week, but returns home to his mother every weekend.
The court heard that he is highly vulnerable and anxious and has communication difficulties. His mother launched court action fearing the council's new policy could potentially have a "devastating" effect on NT's quality of life.
Council chiefs later said there would be no appeal, adding: "We will immediately comply with the judge's ruling and return to the previous eligibility threshold whilst we consider our next steps."
They described the pressure to make "substantial" budget savings while at the same time protecting the vulnerable.
The council said it is facing a cash reduction of £21 million in central Government funding - representing a £33 million budget gap, taking into account inflation and increased need.
Eighty per cent of those savings must be made by the end of 2012-13.
The savings anticipated through changes to the council's community care eligibility criteria, plus charging, amounted to £2.5 million.
In a joint statement, council leader David Pugh and Roger Mazillius, Cabinet member for adult social care, housing and community safety, said: "We are naturally disappointed with this decision, having genuinely sought to undertake a thorough and proper process of consultation.
"The Isle of Wight Council was required to make substantial budget savings within a short timeframe, while at the same time protecting those who were most vulnerable and in need of support.
"We also had to look to the future and position ourselves to face the demographic and financial challenges that the coming years will bring.
"We will now need to spend time reflecting on the implications for both service users and the wider council budget before deciding on our next course of action.
"Throughout this process we tried to ensure that the methods used to consult and the content of that consultation would be understood by residents.
"We worked closely with a range of representative community groups to compile the consultation literature and tried to create the right balance between sharing information and not overwhelming people with too much complex detail.
"We also allowed a full 90-day period for people to consider the proposals and make their response.
"We accept the judge's decision that we did not provide sufficient information and that, in our attempts to explain what was a complex decision, we unintentionally breached some elements of the guidance.
"Our staff will be making contact immediately with the 32 service users who have been directly affected by these changes, to offer a reassessment of their needs.
"We consider that the staff who have managed the changes over the past nine months have done so with care, sensitivity and professionalism and we have no doubt that they will continue to do so as they respond to this outcome.
"If people have queries in relation to whether they are one of the 32 affected, they can contact us on (01983) 823516."
The council said that, in 2010-11, £25.8 million was being spent on care packages - "an overspend on adult social care budgets of £4.1 million".
Spending on adult social care now stood at £44.5 million (net budget).
The council pointed out that the island has a proportionately older population compared with the rest of the country, with nearly a quarter aged over 65, and 11% over 75, and those figures expected to increase.
There are also increasing numbers of people with long-term conditions, including those with physical and learning disabilities.
The council said that, of the 708 service users who were reassessed under the new criteria, only 32 experienced a reduction or withdrawal of services, while 47 had their services increased after they were identified as having additional needs.