Families exiled from the Chagos Islands by the British so the United States military could build a major strategic airbase have won the right to return to their homeland.

In a damning verdict, two judges condemned as "repugnant" the British Govern-ment's decision to "exile a whole population" from the Indian Ocean on the basis that it was necessary for "peace, order and good government".

The judges ruled that the interests of the islanders from the British Indian Ocean Territory (BIOT) had been ignored.

Lord Justice Hooper and Mr Justice Cresswell, sitting in London, held that orders made under the royal prerogative to prevent their return were irrational and unlawful.

Later, leader of the Chagos Refugee Group, Olivier Bancoult, said the Chagos families, many of which have spent their exile in poverty, now hoped to be going home soon.

He added: "This is a very big historic moment."

Solicitor for the islanders Richard Gifford said: "The British Government has been defeated in its attempt to abolish the right of abode of the islanders after first deporting them in secret 30 years ago."

Because of the wide-ranging importance of the landmark decision, which includes a declaration that orders made under the royal prerogative are not immune to judicial review, the judges gave the new Foreign Secretary, Margaret Beckett, permission to appeal.

The ruling is the latest extraordinary twist in what critics have described as one of the most shameful episodes in modern British history - the enforced depopulation of the Chagos Archipelago 30 years ago to provide the US with a strategic navy and air base of unparalleled security.

Between 1965 and 1973, the local people, known as Ilois, who mainly worked on coconut plantations, were forced to leave.

The islanders say that probably more than 1,000 people were forced to go to Mauritius and the Seychelles, where many had problems settling and lived in poverty, and received only inadequate compensation.

More recently many have moved to the UK in an attempt to start new lives.

The British authorities say the numbers removed were many fewer than claimed.

In November 2000, the High Court dealt a blow to the G overnment when it overturned measures introduced in 1971, in the form of an Immigration Ordinance, to keep the Chagossians in exile.

The court held the islanders had a right of return to the group of 65 islands in the Chagos Archipelago, although not to Diego Garcia itself where the base was built.

The then Foreign Secretary Robin Cook said there would be no appeal and a "feasibility study" would be conducted into the possibility of their return.

The US military authorities expressed fears that any attempt to resettle any of the islands would severely compromise the security of Diego Garcia - the island used to launch bombing missions in both Iraq and Afghanistan.

The islanders described their sense of shock and fresh betrayal when, in June 2004, the British Government decided that they could not go back after all.

To legitimise their continued exile, the Government made an Order in Council under the royal prerogative declaring that no person had a "right of abode" in the British Indian Ocean Territory.

Sir Sydney Kentridge QC, representing Mr Bancoult, described the treatment of the Chagossians as "outrageous, unlawful and a breach of accepted moral standards".

The judges said: "The suggestion that a minister can, through the means of an Order in Council, exile a whole population from a British Overseas Territory and claim that he is doing so for the "peace, order and good government" of the territory is, to us, repugnant."

The judges rejected Government argument that the royal prerogative - it consists of discretionary powers, not subject to parliamentary scrutiny, that belong to the Queen but are exercised by Government ministers in her name - were immune from judicial scrutiny.

They ruled that to suggest the making of the Order in Council was "the act of the sovereign, savours of the archaism of past centuries".

They declared: "The decision was in reality that of the Foreign Secretary, not of Her Majesty, and is subject to challenge by way of judicial review in the ordinary way."