On Tuesday, Mr Justice Stephens confirmed he is minded to make the order over a failure to carry out an appropriate assessment of the impact of the A5 scheme on special areas of conservation around two rivers.

But the Department for Regional Development is to be given another chance to argue that the breach should not result in Roads Minister Danny Kennedy's decision being quashed.

All other grounds of challenge advanced by a campaign group seeking to block the two stretches between Derry and Aughnacloy, Co Tyrone were rejected.

Work on the 85km of dual carriageway has been put on hold due to the legal intervention.

Eighteen farmers, businessmen and landowners joined together under the Alternative A5 Alliance grouping in a legal challenge to the project announced in July last year.

The scheme, the largest of its kind ever in Northern Ireland, forms part of a proposed key cross-border business route linking Dublin and the north west.

Uncertainty now surrounds the overall project after the Irish Government downgraded funding due to its tough economic circumstances.

An appropriate assessment should have been but was not carried out under the Habitats Directive.

Judge Justice Stephens

Judicial review proceedings centred on the decision to press ahead with two sections of the route, for which the Stormont Executive has approved £280m.

Lawyers for the Alliance claimed it has now become a different project, and that no proper environmental impact assessment (EIA) has been carried out.

The lobby group proposed an alternative scheme made up of a combination of by-passes and overtaking lanes.

In a 67-page judgment Mr Justice Stephens dismissed this claim, along with others alleging apparent bias of the inspectors at the public inquiry and a breach of the group's property rights.

However, he found there had been a failure to carry out an appropriate assessment of the Rivers Foyle and Finn Special Areas of Conservation under the Habitats Directive.

The judge said Loughs Agency evidence to the public inquiry raised doubts over the effectiveness of remedial measures proposed by the Department.

"The risk of significant likely effects on the integrity of the Special Areas of Conservation cannot be excluded on the basis of objective information," he said.

He added that an "appropriate assessment" was not carried out under the Habitats Directive.

Mr Justice Stephens confirmed: "On that ground the decision should be quashed."

However, he said he would allow the Department the opportunity to make further submissions on whether the breach should lead to such an outcome.

Lawyers on both sides will return to court next week for a final resolution to the case.

Costs of bringing the challenge will also be settled at that stage.

The A5 is an essential lifeline for the west. It has the potential to rebalance the infrastructural deficit west of the Bann and will create hundreds of jobs during the construction period.

Declan McAleer, SF MLA

Sinn Féin West Tyrone MLA Declan McAleer said he is seeking an urgent meeting with Minister Danny Kennedy to ensure that the A5 road proceeds as planned.

"The project is vital for a whole range of reasons," the DRD committee member said.

"It will make the west a more realistic prospect for investors and the economic assessment carried out during the planning stage indicated that its creation will be worth in excess of £1bn to the local economy over the next 60 years."

He continued: "By making the road much safer than the current A5, this will substantially increase safety and reduce road casualties and fatalities. Recent statistics released under FOI highlighted that when the A4 was duelled the number of accidents dropped dramatically and there has been no fatalities to date.

"Today's announcement is a setback for the hard pressed construction industry which has been holding out for this long awaited project with the prospect of up to 800 jobs being created.

"The important thing now is to ensure we put in place all the safeguards to the environment that will allow this project to advance."

Regional Development Minister, Danny Kennedy issued a statement after Tuesday's proceedings.

"During today's hearing, the Judge rejected all but one of the grounds of challenge by those opposing the scheme. He did, however, ask for a further submission from the Department on one aspect in relation to the Habitats Directive.

"My department will now prepare the necessary submissions in relation to this point. It would not be appropriate for me to comment on the likely outcome of this legal challenge in advance of the Judge's final decision," the statement concluded.