EPAThe Home Office's decision to proscribe Palestine Action under anti-terrorism legislation was unlawful, the High Court has ruled.
But the group remains banned for now to allow for further legal arguments and to give the government time to consider an appeal.
In a massive blow to the government, three senior judges said that, while Palestine Action uses criminality to promote its aims, its activities had not crossed the very high bar to make it a terrorist organisation.
Home Secretary Shabana Mahmood said the government would appeal against the court's decision, adding she was "disappointed" by the judgment.
The decision means that while the group has successfully challenged the ban, expressing support for Palestine Action or taking part in its activities remains a serious criminal offence.
A critical issue in the case was whether the ban was impacting the rights of others to protest in support of Palestinian issues, according to the ruling.
Palestine Action co-founder Huda Ammori said it was a "monumental victory for both our freedoms here in Britain and in the struggle for freedom for the Palestinian people".
She said the Home Office's decision to proscribe the group would "forever be remembered as one of the most extreme attacks on free speech in recent British history".
Mahmood said: "The proscription of Palestine Action followed a rigorous and evidence-based decision-making process, endorsed by Parliament."
Responding to the government's intention to appeal the High Court ruling, Ammori said it would be "profoundly unjust" for the thousands of people who have been arrested since the ban took effect last July.
She added it would be a "draconian overreach" to arrest more people on Friday and in the coming weeks for defying the ban, which has been ruled unlawful.
After the judgment, the Metropolitan Police said it would not arrest people for expressing support for Palestine Action until court proceedings are fully concluded.
But it stressed that despite the "unusual circumstances", expressing support is "still a criminal offence" and officers will continue to gather evidence of any offences.
The proscription made membership of or support for Palestine Action illegal, and more than 2,000 people have been arrested at demonstrations in the months since it came into force.
Some 170 of the protesters have been charged with allegedly showing support for the group, which can lead to up to six months in jail.
Ammori said the ban had unjustly led to the arrest of thousands of people who had held up signs reading "I oppose genocide – I support Palestine Action" - although the High Court said its decision attached "little weight" to the circumstances of people who had knowingly supported the group and subsequently been arrested.
PA MediaThe High Court said that when the former home secretary Yvette Cooper decided to ban the organisation last June, she had failed to take into account what impact that decision would have on the right to protest.
She had also not fully followed her own policies regarding the test for when an organisation should be proscribed under the Terrorism Act, it added.
Ammori brought the challenge against the ban, with her lawyers arguing it was a "blatant abuse of power".
The Home Office had tried to stop the judicial hearing from going ahead, arguing that Parliament had set out a specific and alternative process for appealing against banning orders.
But ministers' Court of Appeal bid to block the challenge failed in October, paving the way for Friday's ruling.
Liberal Democrats home affairs spokesman Max Wilkinson said the ban was a "grave misuse of terrorism laws" and placing the group in the same legal category as Islamic State "risked undermining public trust and civil liberties".
Green Party leader Zack Polanski welcomed the ruling, and said those charged with supporting Palestine Action should have their charges dropped.
The Board of Deputies of British Jews and the Jewish Leadership Council said they were "deeply concerned" by the High Court ruling and welcomed the home secretary's plan to appeal against it.
