Home-grown vegetables were on display outside the Royal Courts of Justice in London for the launch of a legal challenge described as "a litmus test for the protection of the country's allotments".

A group of allotment holders are challenging a ruling by Eric Pickles, the Secretary of State for Communities and Local Government, allowing Watford Borough Council to build over an area that has been cultivated by local people since Victorian times.

The allotments at Farm Terrace and adjoining sites are under threat from plans to erect 750 homes and commercial buildings forming a proposed £250 million Watford health campus.

The allotment holders have been offered an alternative site more than two miles away, but they say destruction of the allotments will be a serious blow to the local community.

Court 19 at the Royal Courts was packed by people who had brought their produce to town as High Court judge Mr Justice Ouseley was asked to rule Mr Pickles had made a legally flawed decision after being given a "materially incorrect account of the facts".

Jason Coppel QC, representing those who tend the Farm Terrace plots, told the judge the case was important not just for the Watford gardeners but the dwindling number of allotments around the country.

He said: "Statistics show that only four out of the 199 applications for consent to the appropriation of allotments have been refused in recent years.

"What is different in this case is the allotment holders have fought back and challenged the decision against them."

Mr Coppel added the case was being seen as "a litmus test for the protection of allotments".

The Farm Terrace allotments were established in 1882 on the site of sewage works and now consist of 128 plots cultivated by 48 different plot-holders and their families, some of whom have tended their patches of soil for decades.

According to lawyers in the case, it is the first time that the courts have been asked to rule on the Government's policy for dealing with requests from local authorities to develop statutorily-protected allotment land.

Mr Pickles is currently the minister whose consent is required by local councils under the Allotments Act 1925.

Farm Terrace is special because it consists of terraced plots with rich soil that "any gardener would dream of tilling".

Mr Coppel told the judge allotments are protected by law from development and historically been of great importance to local communities - and played a key role in keeping Britain fed when the Nazis tried to starve the British into submission with a naval blockade during the Second World War.

Watford Council wants to build houses and flats on the Farm Terrace land to maximise the overall financial value of its flagship Watford Health Campus development scheme.

Last year the High Court quashed an earlier decision to grant consent. In December Mr Pickles gave the go-ahead for a second time.

Mr Coppel told the High Court permission was granted on the basis of local council evidence that, without appropriation of the allotments, the campus scheme would not be economically viable and the wider public benefits of improved hospital facilities and housing, including affordable housing, would not be realised.

In short, the rationale behind Mr Pickles' decision was "no allotments equals no project".

But that had "fallen away" and there was now compelling evidence to show the project would go ahead with, or without, the allotments, argued Mr Coppel.

Immediately Mr Pickles made his decision, "three new steps" were taken. The council and its development partners decided a substantial part of the allotment site, up to 20%, would now be used for a new car park for Watford Football Club.

The council then made a series of further public statements that, with or without the allotments, the campus project was profitable and would go ahead.

In January this year, the Environment Agency approved new plans allowing for denser housing development which improved the financial viability of the project even further.

Mr Coppel submitted that the three new steps did not come as a surprise to the council and reflected plans already under consideration, but Mr Pickles was not informed about them.

He argued Mr Pickles's acted unlawfully when he refused to reconsider his decision in the light of the fresh evidence.

Government lawyers are arguing Mr Pickles was not misled and reached "an entirely rational judgment" that remained lawful and fair despite developments that post-dated his decision.

Andrew Moore, one of the three plot-holders bringing today's legal challenge, said out of court: "It is a shame that we have had to take the case this far.

"It's not too late for the council and the secretary of state to change their minds and accommodate the allotments within the development.

"We now know, after having to apply for a court order for the documents to be disclosed, that the developers have a plan that accommodates an inability to use the allotment land, so it is hard to see how the secretary of state's decision can stand."

Adam Hundt, of Deighton Pierce Glynn Solicitors, which represents the plot holders, said: "This case will affect many other sites across the country that are also under threat from development.

"During their campaign my client discovered that in the past seven years the secretary of state rejected only four out of 199 applications to build on allotments.

"As the Farm Terrace case demonstrates, approval seems to be given whether or not the policy criteria for granting consent are met, and irrespective of the views of the National Allotment Society, whom Councils are obliged to consult before applying for consent."

At the same time, both the Prime Minister and the Secretary of State for Communities and Local Government have told the public that they are committed to maintaining the protection afforded to allotments.

"As an avid allotment gardener myself, I hope that this case will ensure that those statements become more than mere rhetoric."

About a hundred demonstrators - men, women and children bearing boxes of home-grown fruit, vegetables and flowers - chanted in one of the most colourful protests recently seen outside the Law Courts: "All we are saying is give peas a chance."

One placard read: "Save Farm Terrace and all allotments."

Sean Mills, 34, was demonstrating with wife Penny, 33, and their four-year-old twins Bethany and Ruby.

The family, who live over the road from the allotments, had brought with them boxes containing Terrace courgettes, lettuces, beans and strawberries.

Sean said of the family digging plot: "The kids love it. They are there every day. It is educational for the kids. We all love growing stuff.

"We just want to keep our land and go on doing it."