Labour has said it will appeal after five new party members won a High Court battle over their legal right to vote in the forthcoming leadership election.

The members accused the party’s National Executive Committee (NEC) of unlawfully “freezing” them and many others out of the contest between Jeremy Corbyn and Owen Smith, even though they had “paid their dues”.

The NEC decided that full members would not be able to vote if they had not had at least six months’ continuous membership up to 12 July – the “freeze date”.

But Mr Justice Hickinbottom ruled that refusing the five the vote “would be unlawful as in breach of contract”.

The court action affects almost 130,000 Labour supporters who were affected by the freeze.

A spokesman for the party said: “The Procedures Committee of the NEC has decided that the Labour Party will appeal this ruling in order to defend the NEC’s right, as Labour’s governing body, to uphold the rule book, including the use of freeze dates.”

The decision to appeal was condemned by shadow chancellor John McDonnell, who backs Jeremy Corbyn remaining as leader.

He said: “This is a deeply disappointing decision by a small clique of people behind closed doors, many of whom have openly expressed their opposition to Jeremy Corbyn’s leadership, who are now trying to use Labour members’ money to fund what they think is a further attack on Jeremy.

“However, this is just an attack on the basic democratic rights of members in our party.

“I hope that Labour HQ rethinks this decision as it could leave a legal bill in the hundreds of thousands of pounds that we could be spending instead on campaigning to hold this Tory government to account, instead of subverting our own democratic processes.”

Commentators believe it would benefit Jeremy Corbyn rather than Owen Smith if the 130,000 are able to vote as there are reports that many of those who signed up later are supporters of the Labour leader.

It is unclear whether the ruling means that all 130,000 will now be able to vote in the contest.

The ruling is potentially “catastrophic” for the timetable of the upcoming leadership election, according to Sky News Chief Political Correspondent Jon Craig.

Ballot papers were due to be sent out from 22 August, but the decision has thrown up the prospect of the deadline not being met.

Craig said the appeal could be heard as early as Thursday, but it is unclear what impact the delay will further have on the leadership race’s timetable.

At a campaign event in Newcastle, leadership contender Owen Smith said the contest should be lengthened to give him and Mr Corbyn time to talk to those who may now be able to vote.

He said: “We should be nothing other than pleased that there are so many people taking part in what is an incredible democratic exercise.”

Mr Corbyn spoke later to a gathering of supporters in Bristol, but failed to mention the result of the High Court hearing.

To gain the right to vote, Labour members were given a window of opportunity, between 18 and 20 July, to become registered supporters upon payment of an additional fee of £25.

Non-members were given the same opportunity.

The five who won the legal challenge are Christine Evangelou, Rev Edward Leir, Hannah Fordham, Chris Granger and FM, a new member aged under 18.

Ms Evangelou, 41, a fitness instructor from Enfield, north London, said she believed most of the new members wanted to help Mr Corbyn “take the party back to its roots.