Hundreds of Gurkhas celebrated on the steps of the High Court today after winning an historic legal battle for the right to settle in Britain.

Celebrating alongside them was the actress Joanna Lumley, whose father served with the Brigade of Gurkhas during the Second World War and who has become the public face of the campaign to deliver them justice.

The Gurkhas, recruited in Nepal, have fought alongside British troops since 1815 after being designated as a "martial race" of the British Empire. In that time they have become renowned for their courage and loyalty.

Six claimants brought a test case against the Government, challenging what has now been declared an unlawful immigration policy which excluded veteran Gurkhas who retired before 1997 from the United Kingdom.

The six, including a wounded Falklands War veteran, a Gulf War veteran and a Gurkha widow, represented approximately 2,000 others who were refused entry to the UK because the Government said they had failed to demonstrate "strong ties" to the UK.

The judge, Mr Justice Blake, made clear that the long military service of the five men, their wounds sustained in battle, their conspicuous acts of bravery, their acts of gallantry and their commitment and loyalty to the Crown all point to an unquestionable historic "moral debt of honour" and gratitude which the ordinary people of Britain embrace and celebrate.

Welcoming the decision, Lumley said: "It gives our country a chance to right a great wrong and to wipe out a national shame that has stained us all.

She added: "Today means that we can at last have this unlawful ruling overturned - but it's not over yet ... until the laws are rewritten."

The campaign will now focus on pushing for legislation to give all Gurkha veterans the same settlement rights as any other British soldiers.

Lumley said that she wanted to take "a million or two million signatures" to Downing Street to press for that and urged supporters to sign up on the gurkhajustice.org.uk website.

The case heard last month was brought to challenge the lawfulness of the government policy that 2,000 Gurkhas who retired prior to July 1997 – the date that the Brigade of Gurkhas moved its base from Hong Kong to the UK – did not have the necessary "strong ties" to be allowed entry.

They were represented by the five soldiers, including Lance Corporal Gyanendra Rai, 52, a Falklands veteran, and Birendra Man Shrestha, 46, who fought in the Gulf War.

All had applied to come to settle in UK, but were refused entry by British Entry Clearance officers at the British Embassy in Kathmandu and the British High Commissions in Hong Kong and Macau.

The Gurkhas directly affected by this decision fought for Britain in all conflicts since the Second World War, including the jungles of Malaya, the Falklands and the Gulf.

Mr Justice Blake ruled that the Home Office policy on settlement applications by Gurkhas who were discharged prior to 1997 was unlawful. He quashed the decisions of the Entry Clearance Officers in each of the claims and ordered the Home Secretary to reconsider the policy so as to permit new decisions by the ECOs.

In a statement, Ms Smith said: "I have always been clear that where there is a compelling case, soldiers and their families should be considered for settlement.

"The judge has agreed that our cut-off date of 1997 is fair. However, in light of the court’s ruling we will revise and publish new guidance. We will honour our commitment to the Gurkhas by reviewing all cases by the end of the year."

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