London's traditional black taxi cab, already under increasing pressure from the number of new Mercedes black cabs prowling the city, could face a third rival after a landmark court ruling.

Allied Vehicles has been attempting to break into the London market with its Peugeot-built Eurocab for years. It has been banned until now by Transport for London because its vehicles do not have a 28-feet turning circle.

Now, however, Allied Vehicles, after several legal victories in cities around the country, has won a court battle with Liverpool City Council which, like TfL, has banned vehicles which do not have sharp turning circles. Mr Justice Blake in the High Court has ruled that an apparently arbitrary rule on turning circles contravenes Article 28 of the European treaty promoting free trade. “We will now go to TfL to review their conditions of fitness”, said Allied Vehicles general manager Donald Pow.

That is bad news for Manganese Bronze, maker of the traditional black cab, which this week admitted its sales are down 10% in the face of a surge of sales of the Mercedes Vito, which has sold 400 vehicles in its first year and has 25% of new black cab sales.