The government plans to cut subsidies for solar panels on homes were ruled legally flawed by the High Court on Wednesday.

The decision was a victory for environmental campaigners Friends of the Earth and two solar companies, Solar Century and HomeSun, who said the plans were creating huge economic uncertainty.

Energy Secretary Chris Huhne wants to cut feed-in tariff subsidies (FITs) -- payments made to households and communities that generate green electricity through solar panels -- on any installations completed after December 12 this year.

But Mr Justice Mitting, sitting in London, said the minister was proposing to make an unlawful decision, the Press Association reported.

The proposed cuts would have saved the government an estimated 700 million pounds annually by 2014-15, but solar panel manufacturers and installers had warned they would mean the loss of many jobs.

We hope this ruling will prevent ministers rushing through damaging changes to clean energy subsidies, Friends of the Earth said in a statement.

Solar payments should fall in line with falling installation costs, but the speed of the government's proposals threatened to devastate the entire industry, it said, adding that ministers must now come up with a sensible plan.

Britain introduced state subsidies for large renewable energy projects in April last year to encourage growth of new green technologies until they reach commercial scale.

The government had already cut rates for the largest schemes by 40-70 percent from August 1, which had caused an outcry among solar plant developers.

The government says average costs of a domestic solar panel installation have fallen by at least 30 percent since the start of the scheme in April 2010 to 9,000 pounds and that if it had left current tariffs unchanged, consumers would be paying 980 million pounds per year for solar FITs.

As well as the UK, Italy and Germany have also cut subsidies to reduce government spending amid a faltering global economy.

The British government has set a solar installation target of 2,680 MW by 2020, compared with 255 MW in place in October.

(Reporting by Stephen Addison; editing by Keith Weir and Jane Baird)