A Crown court judge has thrown out a £4.5m fraud trial after the defendants were left without advocates because of government legal aid cuts.

In a judgment that will be a shattering blow to justice secretary Chris Grayling, His Honour Judge Leonard QC (pictured) refused to adjourn the case of R v Crawley and Others for defence advocates to materialise and instead stayed the proceedings.

Leonard said there was no realistic prospect that enough advocates would become available to take on the case.

Barristers have refused to take very high cost cases since the government cut fees for such cases by 30% last December.

Leonard said there was no reason to think the bar will start to accept VHCCs at the reduced rates and said that the Public Defender Service (PDS) – which had been the Financial Conduct Authority’s (FCA’s) suggested remedy – is ‘so small that it is insufficient’ to cover the cases.

The prime minister’s brother, Alex Cameron QC, acted for the defendants pro bono in the hearing, assisted by solicitor-advocate Lee Adams, partner at London firm Hughmans.

The Crown had been represented by Ben Emmerson QC, Sean Larkin QC, Paul Raudnitz and Polly Dyer.

The decision to stay the case is only in relation to the five defendants in the present trial, dubbed Operation Cotton.

A second trial arising out of the same operation, and six other major fraud trials, are unaffected by the immediate ruling. They remain scheduled to go ahead, but face the same problem of unrepresented defendants due to the legal aid cuts, so may also be in jeopardy.

The prosecution can appeal the stay and were given until 3pm tomorrow to notify the defence and the court whether they will do so.

Commenting as he left court, Adams praised the judge and Cameron for their ‘brave’ decisions, the former for his judgment and the latter for taking the case pro bono.

The Ministry of Justice sought to blame barristers for the collapse. A spokesman said: 'Barristers have refused to work on this case - and a number of other very high cost court cases - because they do not agree with savings the government is making to legal aid.'

He suggested: 'Even after the savings, if a QC picked up a case like this one, they could expect to receive around £100,000 for working on it, with a junior barrister receiving around £60,000. '

In addition, he said: 'The government has made sure that the PDS has a number of suitably qualified advocates who could act in this case.'

Shadow justice secretary Sadiq Khan described the collapse as 'an astonishing indictment' of the government's policies. 'Time and again ministers have been warned their changes to legal aid could lead to miscarriages of justice and trials collapsing. Today, these warnings have come true.'

The FCA said it is considering the judgment and whether to appeal and will not comment further at this stage.

Read the full judgment.