The council had not provided mobile home sites for Gypsies

Appeal judges reinstated a planning inspector's decision that they could stay there on human rights grounds.

Grant Doe, Gregory Yates and Paul Eames all moved on to land at Clearwater, Ratham Lane, West Ashling, in December 2001, without planning permission.

Mr Yates, the freehold site owner, said the case was important for all Gypsies.

Two of the three families have children and they currently occupy three caravans on three plots - Mrs Yates and Mrs Doe, who are sisters, want a fourth plot for their grandparents.

Human rights law

Mr Yates said: "This will affect many other cases in the future.

"Councils must take note of the guidelines and it is important that they identify sites in their areas to be developed."

Appeal judges heard how the planning inspector had taken into account that Chichester District Council had failed to provide sites in its area for Gypsies, in line with government guidance.

The inspector said planning permission should be granted to the Gypsies on human rights grounds after a six-day public inquiry.

But High Court judge Mr Justice Blackburne later ruled that the inspector was wrong in the way he applied human rights law.

Majority decision

On Wednesday, three appeal judges backed the planning inspector in a 2-1 majority decision.

Lord Justice Wall and Mr Justice Pumfrey allowed the appeal.

The right of the families "to respect for the homes which they had created" was at stake, even though the homes had been created in breach of planning laws, Lord Justice Wall said.

He said that right was protected by Article Eight of the European Convention on Human Rights.

Lord Justice Auld disagreed with them on the human rights issue, but said that the appeal should be allowed on other planning grounds.

The Gypsies had the backing of deputy prime minister John Prescott.

A spokesman for Chichester council said the authority was now considering its position and would report to the development control committee on 13 October.