Lancashire county council has lost a landmark legal ruling over privatised healthcare.
The High Court case relates to a £104m contract for community healthcare services, which the county council awarded to private firm Virgin.
Lancashire Care and Blackpool Teaching Hospitals - who previously had the contract for services including school nurses - took out a legal challenge, arguing that the council had not followed procurement processes correctly.
This morning the High Court judgement was published, upholding the legal challenge and ordering the council to stop the process.
A spokesman for both NHS trusts said: “We welcome the ruling from the judge. We are pleased with the outcome and feel vindicated in following the action that we have taken. As public bodies, the Trusts are always reluctant to resort to legal action, in particular against other public bodies.
“However, we felt that we had submitted a strong bid and wanted to gain clarity on why we had not been successful. Going to court has ultimately borne out our concerns with the process carried out by Lancashire County Council and has achieved the result that we were seeking by setting aside the decision that the service should transfer to Virgin Care Services."
The court's ruling potentially lays Lancashire County Council open to a large legal bill.
County Councillor Shaun Turner, cabinet member for health and wellbeing, said: "Putting services out to the market is not a political decision, it is simply part of what the County Council is required to do in order to meet its legal obligations.
"Although we're disappointed in the outcome of this judgement, we are reassured with the exception of the moderation element the County Council's procurement processes was appropriate and that individual panel members were not found to be at fault.
"However, following this judgement, we accept that we cannot award the contract at this time.
"We will not be re-running the procurement or inviting new bids as only the moderation, the final step in the procurement process, was considered to be flawed. We are now considering our options about the next steps.
"Our existing contract with LCFT and Blackpool NHS Teaching Hospitals Trust runs until March 2019 so there will be no disruption to these services.
"We recognise this is a stressful time for our health visitors and school nurses. We value the vital role they play and will continue to support them in delivering the best outcomes for our children and families."