Farmer Jim Telfer had faced eviction from his smallholdings at Damhead where Scottish Ministers formally granted planning permission for the development at the end of last year.

However a new ruling has prevented the landlord from removing Mr Telfer from his home in order to sell the site to film studio’s proposed developers PSL Land Ltd.

The Scottish Land Court had to decide whether to authorise the “resumption” of the two smallholdings farmed by Mr Telfer.

However in its ruling, the court said “the application should be refused for want of a reasonable purpose in relation to the good of the estate”.

Pentland Estate, which owns the land, said it may appeal to the Court of Session.

Nick Gibsone, co-owner of the Estate, said: “We are not by any means a wealthy family and the current estate is little more than 100 acres.

“We have spent five years trying to make the best of what we own and leave a lasting legacy that would be of benefit to the many, not the few.

“We had hoped to reach an amicable agreement with the smallholding tenant, Mr Telfer, within the provisions of smallholding law, which would have resulted in substantial compensation and this remains the case.

“We are disappointed not only for ourselves, and the developers, but for Midlothian and Scotland with the loss of hundreds of potential jobs and the boost to the economy the film studio could deliver.”

The decision has been welcomed by Scottish Green MSPs Alison Johnstone and Andy Wightman, who campaigned in support of Jim Telfer.

The Lothian MSPs said: “It is clear that the landlord has no lawful grounds to resume Jim Telfer’s tenancy. Quite why the landlord, the developers and some voices within the Scottish film industry ignored the fact that a sitting tenant has legal rights that have now been upheld is for them to explain.

“We have been consistent in our support for our constituent throughout this process and hope that the stress and anxiety facing Jim and his family is now over. It is now incumbent on industry and the Scottish Government to deliver the much needed national film studio on a site where development would be lawful.”

PSL Land Ltd said it is now considering its options.

The ruling follows a long-running planning battle for the proposed development.

The decision to approve the Keppie-designed facility overturns an earlier recommendation from a Scottish Government reporter that permission be refused.

The proposal was called in by the government after Midlothian Council failed to make a ruling on the application, which was originally submitted in 2014. Ministers deemed the studio to be of “national significance” and used its Directorate of Planning and Environmental Appeals to rule on the application.

Developers behind the £850 million development on the site of the St James shopping centre in Edinburgh tried to block the plans last January amid fears it could undermine its own project.