Luton council is leading the fight with Nottingham City Council, London Boroughs of Newham and Waltham Forest, Sandwell Metropolitan Borough Council and Tory-run Kent County Council.

Nottingham City Council and Luton Borough Council intend to argue that the decision runs contrary to the council’s ‘legitimate expectation’ that the funding would be forthcoming.

Luton has been lumbered with a £3.6m bill in aborted preparatory work after two schools worth £45m were scrapped just weeks before construction was due to start. Wates was main contractor on its aborted BSF programme.

The hearing into the cancellation of hundreds of millions of pounds worth of school projects is due to begin on Tuesday and is due to last a week.

Cllr Tahir Khan, Executive Member with responsibility for Children’s Services said: “Luton Borough Council welcomes this decision as we believe we have a strong case.

“This legal action was taken reluctantly, and only after having failed to find a way forward from our correspondence with the Department for Education.

“Our action relates to two schools, at a combined cost of £45m, where we were just seven weeks away from construction start.

He added: “We are not disputing the Secretary of State’s right to make a decision to withdraw funding for the Building Schools for the Future programme but we believe the decision reached was irrational and that our individual circumstances were not taken into account.”

Gove said the Government would fight the legal action to expose to everybody how BSF had failed to deliver.

In heated Commons question time exchanges last year, he said: “Unfortunately, in 2008, instead of 200 schools being built fewer than 50 had been built.

“Under the Building Schools for the Future programme, £11m was wasted on consultants – one consultant secured the equivalent of £1.35m while there were schools in my constituency, your constituency, almost every honourable member’s constituency, that needed that resource.”