More than 130 asylum seekers will be allowed to remain in the Bell hotel in Epping after the court of appeal overturned a high court ban on housing them there.

Three judges on Friday set aside a temporary injunction granted to Epping Forest district council last week, saying the decision to allow it was “seriously flawed” and contained several “errors in principle”.

In recent weeks the hotel has become the focus of repeated protests, some of which have been orchestrated by far-right extremists and have turned violent. Epping council had said the protests were part of its grounds for seeking the injunction – alongside concerns about planning permission for the hotel.

Last week, Mr Justice Eyre, sitting in the high court, agreed. But the court of appeal judges said upholding that order could lead to further disorder by effectively demonstrating that such action could achieve protesters’ ultimate goal – the removal of the asylum seekers one way or another.

They said the people living at the Bell hotel would have to be housed somewhere, and other councils could regard preserving the injunction as a green light to do the same in their areas.

Analysing the high court decision, Lord Justice Bean, sitting with Lady Justice Davies and Lord Justice Cobb, said: “If an outbreak of protests enhances the case for a planning injunction, this runs the risk of acting as an impetus or incentive for further protests – some of which may be disorderly – around asylum accommodation. At its worst, if even unlawful protests are to be treated as relevant, there is a risk of encouraging further lawlessness.

“The [high court] judge’s approach ignores the obvious consequence that the closure of one site means capacity needs to be identified elsewhere in the system.”

The judges added that “the potential cumulative impact” of other councils reacting by trying to gain injunctions in their own areas was a “material consideration … that was not considered by the judge”.

The ruling will come as a relief to the site’s owner, Somani Hotels, and the Home Office, which both challenged the injunction, the latter amid concerns it would prompt a host of legal challenges from other councils.Speaking after the decision, the Home Office minister Angela Eagle said: “We inherited a chaotic asylum accommodation system costing billions. This government will close all hotels by the end of this parliament and we appealed this judgment so hotels like the Bell can be exited in a controlled and orderly way that avoids the chaos of recent years that saw 400 hotels open at a cost of £9m a day.”

The Refugee Council’s chief executive, Enver Solomon, said using hotels to house asylum seekers was “untenable”, adding: “Waiting until 2029 to end their use is no longer an option. As long as hotels remain open, they will continue to be flashpoints for protests, fuelling division and leaving people who have fled war and persecution feeling unsafe.”

The charity urged ministers to adopt its “one-off” scheme granting temporary permission to stay to those asylum seekers most likely to be recognised as refugees because of the situation in their home country. This would lead to the closure of hotels by next year, according to its own analysis.

The judges noted that the interim injunction originally granted was due to come into force on 12 September, and would have lasted only until a final decision on the planning permission matter was given after a trial about six weeks later.

They said the original decision was “seriously flawed in principle” on this; pointing out that the “risk of injustice to the residents of the hotel by being dispersed by 12 September when the trial of the claim was to take place only some six weeks later seems to have had oddly little resonance with the [high court] judge”.

Neither the council nor the hotel’s owner had argued in the high court case that the fear of crime being committed in Epping in the future was a key factor, though both had agreed it was relevant.

The court of appeal judges said this was correct, but that it was outweighed by the concern about incentivising more potentially violent protests, the upheaval of having to disperse more than 130 people for the short period before the trial, and other factors in the broader public interest.

The judges said: “We grant permission to appeal, both to Somani and to [the Home Office]. We allow the appeals and we set aside the injunction imposed on 19 August 2025.”

They also agreed Mr Justice Eyre was wrong to refuse to allow the home secretary to intervene in the case; saying the Home Office had a “constitutional role relating to public safety” and was affected by the issues.

Speaking outside the court, the Epping councillor Ken Williamson said: “We are deeply disappointed by the outcome of today’s hearing,” adding: “The battle is not over and we will continue the fight.”

The council could still be granted an injunction after the full hearing of the legal claim.