The "horrific" legal bill for what is believed to be the first courtroom battle between one NHS body and another has triggered public dismay.
The heated clash between the Royal Brompton Hospital in Chelsea, west London, and the body with the task of streamlining children's heart surgery services throughout England is expected to cost about £1.2m.
The Children's Heart Federation charity said it was "horrified" by the bill run up at London's High Court and Court of Appeal and urged other hospitals not "to waste this level of money on further legal action".
The Royal Brompton said it regretted that resources had to be diverted to fund the legal battle, but it was necessary to prevent harm to the hospital's highly-respected services and "to fight to protect the needs of patients - now and in the future".
The hospital's application for judicial review was triggered by a decision of the Joint Committee of Primary Care Trusts (JCPCT) to issue a consultation document on 1 March 2011 stating the "preferred option" was to have two children's heart surgery centres in London - neither of them at the Royal Brompton.
The JCPCT had launched the consultation process as part of the nationwide "Safe and Sustainable" review aimed at streamlining paediatric congenital cardiac surgery services (PCCS).
The review followed the landmark inquiry into children's heart surgery at Bristol Royal Infirmary between 1990 and 1995, where up to 35 children and babies died as a result of poor care.
Last November the Royal Brompton and Harefield NHS Foundation Trust won a High Court ruling quashing the consultation process.
Mr Justice Owen ruled that the JCPCT had failed to assess fairly the quality of the Royal Brompton's research and innovation and accordingly the consultation exercise was "distorted" and unlawful and had to be quashed.
But today three appeal judges - Lady Justice Arden, Lord Justice Richards and Sir Stephen Sedley - disagreed and overturned the High Court decision.
Allowing the JCPCT's appeal and ordering the Royal Brompton to pay legal costs, the judges unanimously declared that "the consultation process cannot be said to be unfair".
The result is that the consultation will continue. The JCPCT made it clear after the judgment that, despite its preferred option of two centres in London, the possibility of a third at the Royal Brompton is still up for discussion.
The "preferred" centres are at Evelina Children's Hospital (at Guy's and St Thomas' Hospital) and Great Ormond Street Hospital (GOSH).
Professor Sir Roger Boyle, former national director for heart disease and stroke, said after today's ruling: "It is novel for one part of the NHS to take another part to court at such a huge cost.
"We know the cost to Brompton will be in the region of £1.2m, plus interest, which need not have been spent."
Sir Roger said it had always been open to the Royal Brompton to make further submissions in support of its case to the JCPCT and had wrongly chosen to go to court.
But the Royal Brompton stated: "We tried hard to avoid the legal route, but when serious assaults are made on patient care, when internationally acclaimed clinical teams are effectively put on notice, when groundbreaking research teams who may be on the cusp of a significant breakthrough in cystic fibrosis tell us their research will not be possible under the proposals put forward, drastic measures are called for.
"We had to fight to protect the needs of patients - now and in the future. What better cause is there than the health of vulnerable children?"