In a decision that could affect the outcome of the leadership contest between Corbyn and Owen Smith, Mr Justice Hickinbottom said it was an unlawful breach of contract for the National Executive to deny those who had been party members for six months or less, roughly 130,000 people, a vote in the contest.
But Labour has now said it will appeal the ruling, despite both Corbyn’s campaign and Smith praising it.
A party spokesman said: “Labour is to appeal against a High Court ruling which said new party members should have the right to vote in the forthcoming leadership election.”
A Labour source told HuffPost UK that 60% of those who had signed up since January were believed to be backing Corbyn.
The judgment also raises the prospect of many of them demanding refunds for the £25 they had to pay to vote as “registered supporters”, on top of their membership fees.
Three of the five members who went to court did this and the judge ordered the party to repay the fee.
Shadow Chancellor John McDonnell, one of Corbyn’s biggest allies in the Commons, described the result as a “huge victory”.
McDonnell said: “This is a huge victory for Labour Party members and party democracy.
“The decision taken to freeze out new members since January was an affront to democracy and went against everything the party stands for.
“We are pleased the High Court has seen sense today by coming to the right decision.”
But McDonnell added he was “appalled” the partycould appeal the High Court decision.
He said: “The Party will be using members’ money to try to stop members from voting. This is unacceptable.
“I’m calling on Owen Smith to join with us in backing party members and calling on the Labour Party not to appeal and attempt to disenfranchise members.”
“We are now calling on the Labour Party bureaucracy to act sensibly and play by the rules for rest of this leadership election.”
In a statement, Smith said: “The Labour Party is the greatest agent for social change this country has ever known and I have always welcomed growth of our party and wider movement.
“Now many more members will have the chance to vote in the leadership election, I am today calling for an extension of the timetable so that all members have the opportunity to engage with Jeremy and me before making their choice.”
A branch of pro-Corbyn activist group Momentum welcomed the decision, saying “shame we had to reach outside the party to reinstate democracy”.
The pro-Corbyn alternative media website The Canary, prone to hyperbole, called the court decision “a major blow to Owen Smith’s leadership chances”.
Former Labour MP Chris Williamson, who backs Corbyn, called the decision a “great victory for democracy”.
Hannah Fordham, who helped organise the crowdfunding campaign for the legal challenge, backs Corbyn, saying she had voted Labour her whole life but Corbyn inspired her to join as a member.
Before Monday’s ruling, she wrote on Facebook: “During Corbyn’s leadership I have watched Labour closely, watched how the media misrepresent Corbyn and how some Labour MPs undermine him.
“But it wasn’t until the Brexit vote and the events following it that I felt I had to join the Labour Party to try and ensure that it continued to represent not just my views, but the views of anyone else who felt unrepresented and unserved by politics previously.”
The five who won the legal challenge are Christine Evangelou, Rev Edward Leir, Hannah Fordham, Chris Granger and “FM”, a new member aged under 18.
Mr Justice Hickinbottom said that, at the time each of the five joined the party, “it was the common understanding, as reflected in the rule book, that, if they joined the party prior to the election process commencing, as new members they would be entitled to vote in any leadership contest”.
The judge added that that was the basis upon which each claimant joined the party, and the basis of their contract with it.
The judge overturned the requirement that they must have been party members since January 12 - that, is at least six months’ continuous membership up to July 12 - the “freeze date”.
He said: “For the party to refuse to allow the claimants to vote in the current leadership election, because they have not been members since 12 January 2016, would be unlawful as in breach of contract.”
The Labour Party was given permission to appeal to the Court of Appeal. It is understood that the appeal could be heard later this week.