Graham’s The Family Dairy, in partnership with Mactaggart & Mickel Homes, lodged an appeal last year regarding its proposals to deliver a £20 million dairy, 600 homes, a new primary school and a public park.

Stirling councillors refused planning permission in 2016 on the grounds it would run counter to the local development plan and result in the loss of a significant area of sensitive greenbelt and the decision was upheld by Scottish Ministers last June.

The dairy firm’s appeal was submitted on the grounds that the decision was not within the powers of the Town and Country Planning (Scotland) Act 1997, in that the decision taken by Ministers was based on irrelevant information being taken into account.

It argued that Scottish Ministers “erred in taking account of irrelevant considerations and/or leaving out of account relevant considerations by failing to take into account the material change in circumstances since the Reporter’s submission of his Report on 1 June 2017”.

In particular, the appellants claimed that Scottish Ministers relied, in full, on the Reporter’s recommendation that to approve the appeal would prejudice the outcome of the Local Development Plan examination. However, this recommendation was made in June 2017 and by June 2018, the LDP Examination had concluded.

As such, the dairy company has argued that the issue of prematurity no longer existed, and furthermore, that Scottish Ministers failed to give proper consideration to the fact that the Local Development Plan process has resulted in a Plan which continues the housing shortfall in Stirling.

The Court of Session ruled in favour of the appeal.

Scotland’s most senior judge, the Lord President Lord Carloway, said that the Scottish Ministers’ decision had failed to show whether or not they had considered the housing shortfall.

He said the Scottish Government had instead considered the LDP which would solve the housing shortage over a short term.

Robert Graham, managing director of the family-owned dairy business, welcomed the decision but expressed his frustration at the planning process.

Mr Graham said: “The Court of Session gave the Scottish Government a very clear message with the decision. It is disappointing that, as a family business, and doing things that tie in with what the government say they are prioritising – creating homes and growing the Scottish economy – [the process] has been so drawn out and led to us taking this to a successful challenge. It is just a very poor process.”

The ruling by the Court of Session means that the dairy firm’s costs will be covered by the Scottish Government.

A spokesman for Stirling Council said: “We acknowledge today’s ruling by the Court of Session which upholds an appeal against a decision taken by Scottish ministers to refuse plans for a housing development at Airthrey Kerse.

“The council are not a party to this matter which was a private case between the developer and the Scottish Government, however, the council maintains its position that it has sufficient housing land supply.”

The Scottish Government added: “We note the opinion of the Court and will now carefully consider it and its implications.”