A High Court judge rejected a challenge by local residents to Islington Council's granting of planning permission.

The path is now clear for The Gunners to build their dream home at Ashburton Grove, which they hope to move into in time for the 2004/05 season.

Arsenal director Ken Friar said: "We are delighted with this outcome.

"It does not come as a surprise, as we knew our proposals were sound, our planning application was of the highest quality, and the council's handling of the application was exemplary.

"Nevertheless, it is a relief to have the challenge rejected.

"Now we are able to get on with building the new stadium and all the regenerative development that will go with it."

Arsenal believe the move will enable them to compete on a more even financial footing with Manchester United.

They were granted planning permission by Islington Council last December, while Ken Livingstone, the Mayor of London, also offered his support to the scheme.

Their plans were given a major boost when former Secretary of State for Transport, Local Government and the Regions Stephen Byers, decided against a public inquiry into the project.

However, the Islington Stadium Communities Alliance lodged papers at the High Court in a bid to quash Islington Council's approval.

ISCA took the action after the council stated it would oppose any delay in the development of a new stadium and associated proposals for the north London site.

The ISCA claimed environmental studies carried out by Arsenal were not good enough to enable the council to decide on the planning applications.

The communities group also contended proper procedures were not followed in the meeting when the council considered the club's application.

However, the Gunners were today given the final go-ahead for the move that will see them switch to the biggest club ground in London.

The project will provide more than 2,000 new or refurbished homes, a sports and community centre, business and industrial space, a larger waste and recycling centre, open space and community health facilities.

Some 83 firms currently at Ashburton Grove will also need to be relocated.