The European Commission is taking the Spanish government to the European Court of Justice over the law, which was introduced in the 1990s and allowed developers to plunder rural land belonging to homeowners if they could persuade authorities that it was suitable for urban developments.

Thousands of British property-owners have had their Spanish homes demolished or devalued by exploitation of the law by developers, who are also able to charge landowners for the services they need to complete building work, such as roadworks, drainage and electricity.

The Commission is claiming that under the law, which was passed by authorities in Valencia, contracts for developments were awarded “without fair competition”, and that £4.4m worth were awarded to friends of corrupt decisionmakers.

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