John Hutton, the Pensions Secretary, yesterday lifted his threat to pursue four retired workers who have lost their pensions for legal costs of more than £120,000.

The High Court's ruling on Wednesday that the government was guilty of maladministration, and that Hutton had acted unlawfully and irrationally in rejecting the findings of the parliamentary ombudsman on lost workplace pensions, was won in the teeth of the financial threat.

Losing the judicial review would have cost the four pensioners their homes, and would have left law firm Bindmans with an unpaid bill for 400 hours of work.

It was only yesterday that the Department of Work and Pensions backed down, with Hutton telling MPs: "So as not to add to their financial difficulty, we will meet the costs of the applicants in this case so far, together with any costs associated with our appeal."

John Halford at Bindmans, the civil liberties and human rights lawyers which took on the case on a "no win, no fee" basis, told The Herald: "There has never been a challenge to the rejection of an ombudsman's report by government before so it was a fairly risky proposition. Because of the importance of the issue, and the need to ensure there was a representative spread of individuals' circumstance, we decided to take the plunge and press on."

He went on: "These are people who have lost a great deal already, all they have left is a small amount of savings and their homes. Had the DWP won, they were estimating their costs to be £120,000."

The claimants, supported by the unfunded Pensions Action Group and its unpaid consultant Dr Ros Altmann, were "very nervous indeed".

"They would have had to sell their homes if the DWP had come after them, it was a very courageous thing to do," Halford said.

"There were many thousands affected by the ruling yesterday, but these individ-uals were the ones who stuck their heads over the parapet."

He said Bindmans had argued persuasively to the DWP last year that the case was in the public interest to resolve and that the four claimants had already suffered a great deal. "We said they should not be threatened with costs. The DWP just said no."

Halford, a judicial review specialist, added: "It is pretty disappointing, because there are precedents for government departments accepting that these sorts of cases do need to be challenged."

On the judgment by Mr Justice Bean, he commented: "It is unusual for judges to say that ministers, particularly when they have personally taken decisions, have acted irrationally and made decisions no reasonable minister would make - but this is what the judgment says."

He added: "There is always a concern that the courts will be worried about making decisions that have implications for the public purse on a big scale, but the judge was willing to focus on the key issues rather than the sky falling in' scenario.

"It is also unusual for there to be a case that is so extremely caught up with the political process - the ombudsman, then the public administration committee, now the High Court judgment, it is different parts of the democratic system all working to hold the executive to account."

On the key role played by Altmann, a governor of the London School of Economics and former pensions adviser to Prime Minister Tony Blair, Halford commented: "It is very unusual for people to commit themselves in this way to a campaign when person-ally she had nothing at all to gain."