Health secretary looks to change law after court confirms government does not have power to downgrade hospital

The health secretary suffered another embarrassing legal defeat on Tuesday when appeal court judges ruled he had acted illegally in cutting A&E and maternity services at Lewisham hospital in south-east London.

The judgment handed down against Jeremy Hunt before lunch on the second day of the hearing in London was greeted with delight by campaigners and Lewisham council, even though ministers are already taking steps to "put beyond doubt" emergency powers to reconfigure health services.

Tony O'Sullivan, director of children's services at Lewisham and Greenwich NHS trust and a member of the Save Lewisham Hospital campaign, said: "This is a complete victory."

He derided ministers and the special administrator of the separate and now defunct South London Healthcare Trust (SLHT), Matthew Kershaw, who put forward the Lewisham cuts as part of a package changing services across south-east London.

O'Sullivan said: "We always said they were acting unlawfully and undemocratically in using an emergency process to bypass meaningful consultation and destroy an excellent hospital."

Alan Hall, spokesman for the controlling Labour group on Lewisham council, said: "This quick decision vindicates Lewisham overall and the council.

"The government has already sneakily tabled an amendment to their care bill to render this judgment ineffective for everyone else, so we must continue the campaign to prevent any future backdoor reconfiguration of NHS services."

The shadow health secretary, Andy Burnham, described the decision as a humiliation for Hunt and said it raised major questions about his judgment. Burnham said the health secretary had squandered thousands of pounds' worth of taxpayers' money "trying to protect his own pride and defend the indefensible" by appealing against a high court verdict in favour of Lewisham campaigners and the council in the summer.

Calling for a commitment from Hunt that he would not try again to downgrade the hospital's A&E services, Burnham said: "He is diminished by this ruling and has let down the NHS. The court has done an important public service today in standing up to an arrogant and high-handed government and a secretary of state who is trying to close A&Es across London in the middle of the worst A&E crisis in living memory."

Hunt was unrepentant. "I completely understand why the residents of Lewisham did not want any change in their A&E services, but my job as health secretary is to protect patients across south London – and doctors said these proposals would save lives," he said. "We are now looking at the law to make sure that at a time of great challenge the NHS is able to change and innovate when local doctors believe it is in the interests of patients."

The judges, headed by the master of the rolls, Lord Dyson, said they would give their reasons for the decision as soon as possible. They would also give a verdict on another aspect of Hunt's appeal against the high court's decision in July. This relates to whether Hunt and Kershaw had met procedural requirements on the proposed structural changes, including consultation and the approval of local GPs.

The SLHT has already been formally wound up, with hospitals and services transferred to other trusts. The changes at Lewisham hospital have not gone ahead pending the legal decision.

Though ministers seemed to be preparing for the defeat with their recent moves to add new legal force to the regime of trust special administrators, the appeal court verdict is a bitter blow, since Lewisham's was the first case under the regime to be considered by the courts.

Lawyers acting for Hunt and Kershaw had claimed they had the necessary powers to recommend and carry out changes to Lewisham services, despite Kershaw being instructed to investigate a separate failing trust of which Lewisham hospital was not a part. Any solution to the problems of SLHT had to take into account the wider NHS context, Rory Phillips QC had said.

The government tabled amendments to its care bill in the Lords earlier this month. In a letter explaining the case for further changes to the regime, Lord Howe, the parliamentary undersecretary for quality, said these would "put beyond any doubt that the trust special administrator has power to make recommendations, and the secretary of state and Monitor [the regulator] the power to take decisions, that affect providers other than the one to which the administrator was appointed."

Requirements for consultation would also be clarified, said Howe.