Labour's ruling body is challenging a High Court decision allowing new party members to vote in the forthcoming leadership election.
The decision is an apparent boost to Jeremy Corbyn in his battle to remain the Labour leader as most new members are expected to support him in his contest against rival Owen Smith.
But party officials are going to the Court of Appeal on Thursday in a bid to reinstate a block imposed by Labour's National Executive Committee (NEC) on 130,000 recruits getting the vote.
The NEC decided that full members would not be able to vote if they had not had at least six months' continuous membership up to July 12.
Five new members challenged the move and accused the NEC of unlawfully "freezing" them out of the leadership contest despite them having "paid their dues".
Mr Justice Hickinbottom, sitting in London, declared on Monday that refusing them the right to vote would amount to a breach of contract.
Party officials say they are appealing to "defend the NEC's right" to uphold Labour's rules.
The case will be heard by Lord Justice Beatson, sitting with Lady Justice Macur and Lord Justice Sales.
Mr Corbyn's allies urged the party not to appeal against the ruling, stating that members' money should not be used to try to stop them from voting.
Shadow chancellor John McDonnell rejected the idea that allies of Mr Corbyn support the ruling only because it could benefit the incumbent.
Mr McDonnell, chairman of Mr Corbyn's leadership campaign, said when people joined they were told "very clearly" they would be able to vote in the leadership contest and "to deny them that democratic right flies against all the traditions of our party".
He insisted his support for the ruling was not because it could improve Mr Corbyn's chances of victory.
Mr Corbyn told BBC Newsnight that the court judgment seemed "very clear" that all party members should be allowed to vote.
"Surely that has to be the right decision," he said.
Meanwhile, Mr Smith has stressed "of course it's possible" that he could still win the contest, but he called for the timetable of the election to be changed.
Mr Smith has also said he believes the split in new members is "probably going to be in Jeremy's favour" and that "it's very clear that I'm the underdog in this".
Mr McDonnell had earlier claimed the decision to appeal had been taken by a "small clique" who opposed the Labour leader.
There has also been speculation that general secretary Iain McNicol could face being ousted if the party loses its appeal as divisions within the party deepen still further.
A senior Labour source said: "If Labour loses the appeal, the position of Iain McNicol becomes untenable.
"Having spent nearly a quarter million pounds on this legal case and staking his professional reputation on the outcome, if he loses today then he simply can't stay in post."
The High Court decision came on the same day that a slate of left-leaning candidates was elected on to the NEC – a development which could potentially help strengthen the Labour leader's grip on the party.
Six spaces for representatives from constituency Labour parties were filled with all six winners deemed to be on the left of the party.
Rev Edward Leir, one of the five members who won the legal challenge, said Labour's decision to appeal was "madness".
He told the BBC Radio 4 Today programme: "This wasn't a spurious action, it's not been politically motivated. It's been about people holding on to their promises."
Mr Leir revealed he had campaigned for David Cameron in the 2010 election but had been won over by Mr Corbyn.
"My heart leads towards Corbyn. In my youth for two decades I was a supporter of the Conservative Party," he said.
"I actually canvassed for them the election before last. Found myself deeply disappointed with the direction they were going in and surprisingly found myself really agreeing with the way Jeremy Corbyn was trying to bring change to politics."