Developers wants to spend �350m regenerating the area

Elizabeth Pascoe, of Edge Lane, faces losing her Victorian terrace home after she was issued with a compulsory purchase order (CPO).

She has won legal aid to challenge the order issued by regeneration agency English Partnerships.

About 400 residents could be forced to sell their homes under the plan.

The Liverpool Land Development Company plans to spend �350m on a scheme to regenerate the area.

Developers plan to widen the road and build new homes and businesses, claiming the scheme will improve traffic flow and regenerate the area.

We are confident that the decision on the compulsory purchase order will be upheld David Waugh, Liverpool Land Development Company

Mrs Pascoe's solicitor, Phil Shiner, said: "This High Court challenge is a very important test case about the powers of local authorities and English Partnerships to remove people to regenerate their communities.

"The effect will be devastating for the community and there can be no public interest in this case."

Ms Pascoe said: "My community will be destroyed, only to be replaced by another, more affluent community.

"This issue concerns my house and my life and goes against the interests of the community."

David Waugh, chief executive of the Liverpool Land Development Company, said they were aware of the court action.

"We are fully aware that the legal process allows for a challenge to be made, and we have provided for this in the project timetable on the basis that a hearing would take place expeditiously," said Mr Waugh.

He said the company was very disappointed by the challenge given the strength of the recommendation made by the Inspector to the Secretary of State.

He said the project would bring "huge and long-awaited benefits" to the residential and business communities in the area, as well as to Liverpool as a whole.