Judges have ruled that Birmingham City Council's plans to limit social care for disabled people are unlawful.
The families of four severely disabled people took the case to the High Court sitting in Birmingham.
The test case is the first in a series of possible legal challenges to councils around the UK mounted by those facing cuts to social care.
Birmingham City Council is planning to reduce care packages to about 4,000 people over the next three years.
The authority, a Conservative-Liberal coalition, says it needs to make the cuts to help slash £118m from its adult and communities directorate.
In total, a spokeswoman said, it needs to save £308m from its budget.
It explained that only those whose needs had been assessed as "critical" would qualify for council-funded care.
But the judges ruled that the council business plan was unlawful because it failed to comply with Section 49a of the Disability Discrimination Act.
The four people, who cannot be named for legal reasons, include a 65-year-old woman with severe learning difficulties who receives 24-hour care in a home paid for by the council.
They also include a 25-year-old man with a rare genetic disorder and severe learning disabilities who receives overnight respite care, also funded by the council.
Both were set to lose their council-funded care.
The sister-in-law of the 65-year-old woman said: "I'm deeply concerned about what impact this will have and it's important to take a stand here.
"She relies on the council's support to assist her with daily living skills and to support and promote her independence, including assisting with personal care tasks, preparation of meals and safely accessing the community.
"The care is hugely beneficial and without it her quality of life would fall dramatically."
The case was also brought on behalf of a 30-year-old deaf, autistic man with severe learning disabilities who is prone to self-harm. His specialist day care would also have gone under the plans.
The fourth person is a 36-year-old woman with severe learning difficulties whose day care centre will close and who is also set to lose respite care.
A spokesman for the council said they would be looking at the judgement in detail before making a decision on whether to lodge an appeal.
He said: "The generality of the budget is not affected, this is a decision about the eligibility criteria for adult social care.'Opportunity to pause'
"Like all councils, Birmingham faces a huge financial challenge, with adults and communities having to make a share of the savings like all other directorates, and we need to assess the impact of this decision.
"It is also important to point out that this judgement is about the process we went through with regard to the Disability Discrimination Act, not the actual decision about where savings should be made."
Tony Rabaiotti, head of local government in the West Midlands for public sector union Unison, welcomed the ruling.
He said: "This is a landmark ruling and a tremendous victory for thousands of vulnerable people across Birmingham who rely upon social care provision.
"Social care workers across Birmingham have been telling Unison over the last few months that they are genuinely frightened by the proposal to so severely axe social care provision.
"They have been telling us that vulnerable people will simply be left to fend for themselves. The council now has the opportunity to pause, think again and work with us to maintain quality social care provision for the people of Birmingham."