Government guidance in relation to granting legal aid for immigration cases has been declared "unlawful" by leading judges.

Earlier this year the High Court in London ruled that the guidance issued by Lord Chancellor Chris Grayling was "unlawful and too restrictive''.

A judge in London said the guidance ''sets too high a threshold'' and ''produces unfairness'' by denying publicly-funded legal advice to applicants in ''exceptional cases''.

The Government appealed against that ruling to the Court of Appeal.

Today Master of the Rolls Lord Dyson, who heard the appeal with Lord Justice Richards and Lord Justice Sullivan following the decision of Mr Justice Collins in the High Court, announced that the guidance was "unlawful".

Quashing refusals of civil legal aid in six cases, Mr Justice Collins said in June that it was ''a fundamental principle that anyone in the UK is subject to its laws and is entitled to their protection''.

He said: ''Thus there must be a fair and effective hearing available and the guidance, as the facts of some of the cases I have dealt with show, produces unfairness.''

The judge quashed refusals by the director of legal aid casework, relying on the Lord Chancellor's guidance, to grant legal aid to six claimants.

All the cases concern the availability of legal aid in immigration cases under Section 10 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Laspo), which deals with exceptional funding applications.

Mr Justice Collins said the cases involved EU nationals appealing against decisions that they should be deported following criminal convictions, an alleged victim of trafficking from Nigeria, and other cases involving the right to enter and remain in the UK.

He indicated that in some of the six cases legal aid should have been granted, but said all of them must be reconsidered in the light of the ruling.

He said: ''I have decided that the guidance in certain respects is indeed unlawful in that it is too restrictive and in other respects not in accordance with the law.''

The Government's flagship Laspo legislation was introduced to reform the legal aid system in order to cut the legal aid bill by £350 million a year by 2015.

The Act made wide-ranging changes to the provision and scope of legal aid, including for immigration cases, and most of the reforms came into force on April 1 2013.

A Ministry of Justice (MoJ) spokesman said after the ruling: "We note the judgment and will carefully consider our next steps.

"We continue to believe that the exceptional funding scheme is functioning as intended. Its purpose is to provide funding where it is legally needed.

"Legal aid is a vital part of our justice system but resources are not limitless and must be properly targeted at the cases that need it most. The system must be sustainable and fair for those who use it and the taxpayers who pay for it."

Announcing the court's decision, Lord Dyson said: "As is well known, the effect of Laspo was to limit the circumstances in which civil legal aid can be granted.

"Legal aid was withdrawn in a large number of types of case. But provision was made for exceptional case funding by section 10.

"The Lord Chancellor has issued guidance to which those responsible for deciding whether to grant exceptional case funding must have regard.

"The aim of section 10 and of the guidance is that legal aid should be provided where it is necessary to ensure that litigants have effective access to justice as required by the Convention on Human Rights and the EU Charter of Fundamental Freedoms."

He said the court concluded that the guidance "is unlawful because it misstates the effect of the relevant jurisprudence".

The judge added: "It correctly identifies many of the factors that should be taken into account in deciding whether to grant exceptional funding, but it neutralises their effect by wrongly stating that the threshold for funding is very high and that legal aid is required only in rare and extreme cases.

"It is also unlawful because - as is conceded by the Lord Chancellor - it wrongly states that there is nothing in the current case law which says that article 8 of the Convention requires the provision of legal aid in immigration proceedings."

By the time the Government's challenge reached the Court of Appeal, only five of the six cases decided at the High Court remained "live" for consideration by the three judges.

It was conceded in the case of a blind Nigerian national, referred to only as IS, that Mr Justice Collins was right to allow his application for judicial review over the refusal to grant exceptional case funding (ECF).

Lord Dyson said in today's ruling that IS had lived in the UK for at least 13 years: "He is blind, has profound cognitive impairment and is unable to care for himself."

He added: "Legal aid was sought to enable him to apply to the Home Office to regularise his immigration status and thereby qualify for mainstream community care and health services."

The application was refused by the director of legal casework on the grounds that Article 8 - the right to respect for private and family life - was "not engaged", said Lord Dyson.

Mr Justice Collins had sent the case back to the director for reconsideration, and in August the director "formally determined that IS qualified for legal aid to regularise his immigration status".

Lord Dyson said: "The case of IS is extreme. It is impossible to see now a man suffering from his disabilities could have had any meaningful involvement in the decision-making process without the benefit of legal representation."

The appeal court had considered the "five live appeals afresh for ourselves applying Convention and EU law principles to the facts of each case".

They dismissed Government challenges in three of the cases and allowed the other two.

The judges pointed out that "in some circumstances, legal advice to the litigant in person may be more important than legal representation at the hearing for ensuring effective access to justice".

Lord Dyson said: "We suggest that consideration be given to whether, in an appropriate case, ECF be provided for early legal advice even where it is not considered to be necessary for representation at the hearing."

Shadow justice minister Andy Slaughter said: "Just when you thought the mess caused by the Government's legal aid changes couldn't get any worse, new depths are plumbed.

"The Government's legal aid cuts were rushed through and Labour, alongside most of the legal profession, warned that this would raise substantial barriers to access to justice.

"David Cameron should listen and fix the mess that he has created."