Save Our Rail has won a historic court injunction that stops the state government from removing the tracks from the Newcastle rail corridor.
The Supreme Court ruled that an act of Parliament was still required to rip up the tracks even though the rail infrastructure was transferred into Hunter Development Corporation hands earlier this week.
Rail Corp transferred ownership of the tracks, wires and signalling system to HDC on December 19 in an apparent attempt to get around the Transport Act.
Justice Michael Adams ruled that HDC had, in fact, become a rail infrastructure owner, which under section 99A of the act means it needs an act of Parliament before the tracks can come up.
However Justice Adams told Rail Corp it could still remove 700 metres of wiring from around Wickham Station on safety grounds.
Rail Corp will appeal the decision but must replace the cabling if the appeals court throws out that challenge.
"David didn't kill Goliath today but we gave him an almighty headache for Christmas," Save Our Rail vice-president Kim Cross said.
Services are still expected to start and stop at Broadmeadow railway station from Boxing Day.
"The case didn't deal with the Transport NSW decision on services," Ms Cross said.
Save Our Rail won court costs and has vowed to continue the fight.
"This is an important step in our continued fight to have services restored to Newcastle," Ms Cross said.
"While ever the line remains they cannot build there."