Gipsies who turned a field in north Wiltshire into a 16-pitch mobile home site without planning permission over one August weekend five years ago have finally won the right to stay for ever.

A planning inspector has ruled that local residents and planners will never be able to move on the gipsy families, whose battle turned into one of the most infamous between the Romany community and local councils in England.

Residents living near the site in Minety, near Malmesbury, said they were outraged at the decision, while gipsies said they were relieved their long fight was over. However, it wasn't a total victory – planning inspector Karen Ridge ruled the gipsies should at least pay most of their costs for the lengthy battle.

The saga began over the August bank holiday in 2003. A collection of gipsy families, who had earlier bought land on the eastern edge of the village of Minety, arrived en masse on the Friday afternoon with heavy equipment.

In what was to become a much-used strategy in the years since, a half filled-in planning application was lodged just before the council offices closed that Friday afternoon. By the time planning officers visited on the Tuesday, the site was virtually a fully fledged mobile home site, with water, electricity, plots, roads and 16 families living happily.

The nearest house belonged to Verina Hyland, who led the battle against the gipsies' arrival. At a stormy public meeting within a fortnight of their arrival, more than 400 people packed the village hall and demanded planning laws be upheld.

Councillors threw out the gipsies' planning application, but they appealed a couple of times, and in 2005, the then-Deputy Prime Minister John Prescott intervened, catapulting the Minety gipsies into the national consciousness. He allowed them to stay temporarily, in a decision which was seen as setting a precedent for a host of other similar cases, and that permission has now been granted permanently by the Government planning inspector.

Ms Hyland said last night: "I am utterly disgusted. It's contemptible. It is an open-door policy on the rest of the countryside."

But council chief Dick Tonge was more reflective. North Wiltshire District Council was thrown into chaos earlier this summer after it tried to find alternative homes for the 16 gipsy families, and ended up sparking widespread protests in towns across its district.

Councillor Tonge said: "As the local planning authority we have done the right thing. We refused the application, but the planning inspector has overturned our decision., based on central Government guidance.

"We have supported the Minety residents, but we have no alternative but to respect the planning inspector's decision."

The Minety gipsies said they had gone to great lengths to integrate into the community – their children attend the local primary school, and their main motivation for settling there was to provide a stable base for their children to access education and health care. One gipsy, Donna Stevens, said: "I am relieved it's all over. The local people were never going to lose their homes like we could. Now we want to forget about it – we've had enough."

Meanwhile, a 12-week public consultation on gipsy and traveller sites in South Gloucestershire was agreed by the council's cabinet at a meeting yesterday.

The consulation , which could start within a month, will allow residents to give their views on proposed sites for travellers.

All councils in England are required to assess accommodation needs for gipsies and travellers, and inform the Government how they intend to meet them.