Campaigners fear council housing across the country could be sold off in widespread gerrymandering scams following Dame Shirley Porter's successful appeal against the £27m surcharge for her involvement in the Homes for Votes affair.

The Court of Appeal last week ruled two-to-one in favour of the former Westminster council leader and her deputy, David Weeks.

Lord Justice Schiemann said the pair had lawfully pursued their controversial "designated sales" policy which sought to sell council homes to likely Tory voters in marginal wards and so boost election prospects.

Schiemann argued that by seeking legal advice before implementing the policy, Porter and Weeks had acted within the law.

Schiemann said: "It is legitimate for councillors to desire that their party should win the next election. Our political system works on the basis that they desire, that they think, that the policies to which their party is wedded are in the public interest and will require years to be achieved."

He added: "There is nothing disgraceful or unlawful in councillors having that desire. For this court to hold otherwise would depart from our theory of democracy and current reality." Porter and Weeks had previously been found guilty of wilful misconduct by the district auditor, John Magill, and had also lost an appeal to the Divisional Court.

Magill, who said he was "surprised" by the verdict, was immediately allowed to appeal to the House of Lords, which is expected to discuss the case near Christmas this year.

He and Labour activists will claim the ruling would have profound implications for local politics and housing across the country.

Westminster Labour councillor Paul Dimoldenberg told Housing Today the decision could potentially see copycat gerrymandering scams throughout the country.

He added that so far six High Court judges have passed judgement on the scandal - four finding in favour of Magill. He insisted: "The case against Dame Shirley Porter is not over yet. She has not won."