The Birmingham Care Consortium (BCC) will now apply for a judicial review, challenging the city council's refusal to fund placements at a number of residential care and nursing homes.

The BCC, representing seven home owners, along with a group of residents and their relatives, claim the authority's policy amounts to a "boycott" of their businesses.

They also claim the policy is denying the elderly a choice of care home.

The council is currently refusing to place residents in homes which have drawn up a series of new contracts.

After hearing legal argument from both sides, Philip Havers QC, sitting as a deputy judge in the High Court in London, granted the campaigners permission to apply for judicial review.

A full hearing will be held on October 9.