In a case brought by the Project for the Registration of Children as British Citizens (PRCBC), the court found a “mass of evidence” showing that the fee prevents many children from registering for British citizenship, leaving them feeling “alienated, excluded, ‘second-best’, insecure and not fully assimilated into the culture and social fabric of the UK”.

The current administrative processing cost of a child’s registration claim is only £372. The Home Office uses the remaining £640 to cross-subsidise the immigration system.

The court’s judgment requires the Home Office to reconsider the fee and ensure that children’s best interests are taken fully into account in doing so.

The case was brought by three claimants – two children, A and O, aged three and 12 and both born in the UK; and the PRCBC.

The court has made clear that where a child has a right to British citizenship it will generally be in the child’s best interests to be registered as British – something the Home Office had denied in evidence to the court.

While the court ruled the Home Office failure to consider children’s best interests rendered the fee unlawful, it rejected a separate argument that there was simply no power in law to set the fee above administrative cost and beyond the reach of many children entitled to citizenship.

The court described that argument as “powerful and sustained” but decided it could not uphold the argument due to an earlier ruling of the Court of Appeal. However, the court has granted a certificate to the claimants to apply directly to the Supreme Court for permission to appeal on this point. It has also granted permission to appeal to the Home Office.

Carol Bohmer, chair of PRCBC, said: “This is a landmark ruling. But the fight for justice for children born and growing up in the UK goes on.

“PRCBC was founded barely seven years ago because of the scandal of children entitled to British citizenship being treated as if they had no more right to be in their home country than a visitor.”

Responding to the judgment, O, who has lived in the UK her entire life and gave a witness statement to the court, said: “I am glad I got to tell the court my story.

“I was born in this country and have lived here all my life. I feel as British as any of my friends and it’s not right that I am excluded from citizenship by a huge fee.

“I want to be able to do all the things my friends can. I don’t want to have to worry they will find out I don’t have a British passport and think that means I am not the same as them.”

Solange Valdez-Symonds, solicitor for the two children, said: “It is significant that the court has recognised British citizenship is the right of these and thousands of children and that the consequences of blocking their registration rights is alienating and harmful.

“While that recognition is a great step forward, the fact remains that tens of thousands of British children are growing up in this country deprived of their rights to its citizenship, including by this shamelessly profiteering fee.

“For too long, children and their citizenship rights have not been respected. That must change. The Government should make an immediate start by ending the use of this fee to raise revenue for the Home Office.”

PRCBC was represented pro bono by Mishcon de Reya solicitors (Maria Patsalos, Lucy Grant, Lydia Boateng) instructing pro bono Richard Drabble QC of Landmark Chambers and Miranda Butler of Garden Court Chambers; and A and O were represented by Solange Valdez-Symonds of Consonant instructing Richard Drabble QC and Admas Habteslasie of Landmark Chambers and Jason Pobjoy and Isabelle Buchanan of Blackstone Chambers.