A report saying Blackburn with Darwen Council was wrong to order the demolition of 150 homes will be met by a legal challenge.

The council will appeal to Communities Secretary, Ruth Kelly MP, against the decision about Darwen's Redearth Triangle.

The inspector said the homes should have been renovated but the council overplayed their poor condition to justify demolition.

The move, following a public inquiry, stripped the council of the compulsory purchase order which would have given it the power to buy and demolish the area's remaining 11 privately owned homes.

The land has been set aside for a £33million academy but Rod Aldridge, the businessman behind the scheme, has given the council until December to get the land.

He said it was crucial the plot was delivered by then to ensure the academy opened on time in September 2008.

Council lawyers think the authority has a strong argument but declined to reveal the basis of their case.

The council also plans to fight an interim injunction banning anymore demolition, pending the outcome of a possible judicial review into whether the council should be allowed to knock down any more homes in light of the government inspector's decision.

The injunction prevents the council carrying out any more demolition work in the area, where about 60 out of 150 homes remain.

Residents are waiting for permission' from a judge for a judicial review hearing to take place.

Linda Comstive, council solicitor and director of legal and democratic services said: "The council has sought legal advice and we believe there are grounds to mount a challenge. This is expected shortly.

"We will continue to stand by those residents who are actively negotiating the sale of their homes to us and will be doing all we can to ensure this decision does not threaten the many million pounds of investment that benefits the future of the children of Darwen and ensure thriving, sustainable neighbourhoods."

Simon Huggill, 56, of Sough Road, who represented residents at the public inquiry said he was not surprised by the development.

"Is this a wise use of public money? My understanding of the inspector's report is that it's an extremely fair document," he said.

"I wonder what the basis of the challenge is, as it was a sound and well reasoned report."