John McDonnell accuses Labour HQ of bringing shame on the party following Appeal Court ruling

Labour MPs trying to oust Jeremy Corbyn were given a ray of hope when the Appeal Court ruled that 130,000 new members will not be allowed to vote in the party’s leadership election.

Mr Corbyn attacked the decision by three judges as wrong “both legally and democratically” as the unprecedented dispute between him and Labour HQ reached new levels of bitterness. The court backed Labour’s decision to exclude the new members.

John McDonnell, the shadow Chancellor and chair of Mr Corbyn’s leadership campaign, said: “I just find it shaming for a democratic party like ours, with a tradition over a century of campaigning for democracy throughout our society. We are now undermining the democracy of our own party. They used a grubby little device.”

Most of the barred members were thought likely to vote for Mr Corbyn rather than his challenger Owen Smith. However, some of the 130,000 disenfranchised members may get a vote because they also paid £25 to become registered supporters.

Mr Corbyn is still expected to win re-election next month. But the Appeal Court ruling means Mr Smith might run him closer, and it could encourage some waverers to back the challenger if they think the result is still in doubt.

The judges upheld an appeal by Labour against the High Court’s ruling that people who joined the party between January and July should get a vote in the contest. The High Court ruled against the controversial cut-off date decided by Labour’s governing body, its national executive committee (NEC).

The five Labour members who challenged the court’s original ruling must pay £30,000 towards the NEC’s £60,000 costs within 28 days. Permission to appeal to the Supreme Court was denied. An application to the highest court could still be made, but a Corbyn ally told The Independent this was “unlikely.”

The Appeal Court verdict was a victory for Iain McNichol, Labour’s general secretary, who led the appeal and Tom Watson, the party’s deputy leader, who backed it. Left-wingers had warned their positions would become “untenable” if they lost the costly appeal. Any immediate threat to them has receded – although Mr Corbyn could use his new muscle following elections to the NEC to try to sack Mr McNichol at a later stage as his allies try to strengthen their grip on the party. Mr Watson, who was elected by Labour members, is in a stronger position.

A spokesman for Mr Corbyn’s leadership campaign said it was the “wrong decision - both legally and democratically” because it would disenfranchise members told when joining the party that they would have a vote in any leadership election.

The Corbyn camp said: “Crucial to the outcome today was the introduction of a new argument by the Labour Party HQ’s lawyers, who invoked an obscure clause in the Labour Party rules which could be read as giving the NEC the right to ignore all of the rules laid out for leadership elections. In other words, this is a ‘make it up as you go along’ rule. We do not think that making it up as you go along is a reasonable way to conduct democracy in our party.”

The Rev Edward Leir, one of the five disenfranchised members who took legal action, told journalists the judgement was “highly disappointing”. Mr Leir, who revealed he had campaigned for David Cameron in the 2010 election but had been won over by Mr Corbyn, added: “The case was always about fairness and inclusion, which was won in the High Court on Monday, with clear and firm judgement.I am very grateful for everyone, including the 2,000 donors, who have supported our fight over this matter so far.” A crowdfunding page set up to cover the costs of the members’ legal fees had received over £36,000 in donations from members of the public.

Mr Smith said the Appeal Court decision would change his approach. He added: “I'm meeting people who joined the Labour Party to renew the Labour Party, some of those people initially might have supported Jeremy, but increasingly I think I am persuading them we need a new generation of Labour men and women to carry the flag forward for us, to get us ready for power once more.”

Announcing the Court of Appeal's decision on Friday, Lord Justice Beatson, sitting with Lady Justice Macur and Lord Justice Sales, said: “On the correct interpretation of the party rules, the NEC has the power to set the criteria for members to be eligible to vote in the leadership election in the way that it did.”

Labour had argued that the party’s governing body, rather than the courts, are the “ultimate arbiter” of the rule book. Lawyers for the five - the Rev Leir, Christine Evangelou, Hannah Fordham, Chris Granger and “FM”, an unnamed teenage member - argued that the NEC had no power under the rules to retrospectively freeze a full member's ability to vote in leadership elections.

Paddy Lillis, who chairs the NEC, said the party welcomed the decision to exclude the new members from voting in the forthcoming contest. “The party has said consistently throughout this process that we would defend vigorously the decisions of the NEC,” he said.

Before the court’s decision, the Corbyn camp played down the prospects of victory for the five members. “I wouldn’t be surprised if it didn’t go our way. It’s a coin toss,” one ally said.