CAMPAIGNERS have won a legal challenge over the UK government's decision to allow arms sales to Saudi Arabia.

The Government announced it will temporarily halt the granting of new licences to export arms to Saudi Arabia after the landmark legal victory.

Campaign Against Arms Trade (CAAT), which brought the case against International Trade Secretary Liam Fox, welcomed the Court of Appeal's verdict that continuing to license military equipment for export to the Gulf state was unlawful.

Saudi Arabia is a major customer of BAE Systems, which employs 10,000 at its factories in Samlesbury and Warton.

After the court's decision was announced, the Government said it planned to challenge the ruling - but that it would not grant any new licences while it considered the judgment.

Mr Fox told the House of Commons: "We disagree with the judgment against the Government ... and will seek permission to appeal (against) the judgment."

He added: "We are carefully considering the implications of the judgment for decision-making.

"While we do this, we will not grant any new licences for export to Saudi Arabia and its coalition partners which might be used in the conflict in Yemen."

A BAE Systems’ spokesman said: “We note the decision by the Court of Appeal directing the UK Government to revisit one specific aspect of its decision-making process for granting export licences for the sale of military equipment to Saudi Arabia. BAE Systems is not party to the proceedings.

“We continue to support the UK Government in providing equipment, support and training under government to government agreements between the United Kingdom and the Kingdom of Saudi Arabia.

“We will assess the result of the UK Government’s reconsideration of its decision-making on the basis set out by the court, once it has been made.

“BAE Systems has a well-established legal and regulatory compliance structure for ensuring adherence to all relevant export control laws and regulations in the countries in which it operates.”

CAAT argued that export licences should not have been granted as there was a clear risk that the arms might be used in a serious violation of international humanitarian law.

Giving judgment in London on Thursday, the Court of Appeal ruled that "the process of decision-making by the Government was wrong in law in one significant respect".

Announcing the court's decision, Master of the Rolls Sir Terence Etherton, sitting with Lord Justice Irwin and Lord Justice Singh, said the Government "made no concluded assessments of whether the Saudi-led coalition had committed violations of international humanitarian law in the past, during the Yemen conflict, and made no attempt to do so".

Sir Terence added: "The decision of the court today does not mean that licences to export arms to Saudi Arabia must immediately be suspended."

He said the Government "must reconsider the matter" and estimate any future risks in light of their conclusions about the past.

Andrew Smith of CAAT said: "We welcome this verdict, but it should never have taken a court case brought by campaigners to force the Government to follow its own rules.

"The Saudi Arabian regime is one of the most brutal and repressive in the world, yet, for decades, it has been the largest buyer of UK-made arms.

"No matter what atrocities it has inflicted, the Saudi regime has been able to count on the uncritical political and military support of the UK.

"The bombing has created the worst humanitarian crisis in the world. UK arms companies have profited every step of the way. The arms sales must stop immediately."

Lucy Claridge, director of strategic litigation at Amnesty International, which intervened in the case, said: "This judgment is a rare piece of good news for the people of Yemen.

"During four years of devastating war, the Saudi Arabia-led coalition has killed thousands of civilians in Yemen, flattening homes, schools and hospitals in indiscriminate air strikes.

"This is the first time that a UK court has acknowledged the risks of continuing to lavish Saudi Arabia with military equipment for use in Yemen.

"We welcome this judgment as a major step towards preventing further bloodshed."

The Court of Appeal's judgment was also welcomed by opposition political parties.

Shadow foreign secretary Emily Thornberry said in a statement: "This devastating judgment proves everything Labour has been saying for years: that ministers have wilfully disregarded the evidence that Saudi Arabia was violating international humanitarian law in Yemen, while nevertheless continuing to supply them with weapons.

"What we now need is a full parliamentary or public inquiry to find out how that was allowed to happen, and which ministers were responsible for those breaches of the law."

Liberal Democrat foreign affairs spokeswoman Jo Swinson said: "Saudi Arabia is an enemy of British values, including human rights and the rule of law.

"Their repeated violation and disregard for human rights should have ruled them out as an arms trading partner long ago.

"Instead the Conservative Government have continued to export arms and equipment to this brutal regime. The situation is inexcusable and cannot continue.

"This court ruling is monumental. It is now clear for all to see: the UK arms sales to the Saudi regime are unlawful."