The Home Office has been criticised for its attempts to deport a 23-year-old Thai man from Shetland.
Judges at an immigration tribunal in North Shields said it was wrong to try to deport Sakchai Makao as a foreign national with a criminal record.
Makao welcomed the judgement and said he hoped the Home Office would not appeal the decision.
He spent eight months in jail in 2004 for fire-raising on Shetland, where he has lived since he was 10.
Makao was arrested as part of a clampdown on foreign nationals with serious criminal convictions.
His deportation appeal was heard in North Shields in Tyneside on 7 July.
The judges, who published their written judgement on Friday, ruled that he should be allowed to remain in Shetland.
The panel said the UK Government did not take his circumstances into account.
"I hope that this will now be the end of this and that the Home Office will not appeal the decision"
It said the Home Office did not take into account Makao's age, his long-standing connections with the UK and the degree of community support for him.
Speaking after the judgement, Makao said: "I am pleased that we have a judgement that is very clear. I hope that this will now be the end of this and that the Home Office will not appeal the decision.
Appeal deadline
"It is clear from the decision that the support of the people of Shetland has made an enormous difference and I shall always be grateful to them for that."
The tribunal hearing heard Makao's fire-raising was committed when his stepfather had just died from cancer and a baby he had with his girlfriend had passed away only a few hours after birth.
The Home Office has five working days to decide whether to lodge an appeal.
"I hope the Home Office will draw a line under this whole sorry episode"
Commenting on the judgement, Orkney and Shetland MP Alistair Carmichael said the Home Office had failed to follow its own rules.
He said: "The court says they (the Home Office) were 'unhesitating' in reaching the decision they did and describe it as 'inevitable'.
"I hope the Home Office will take heed of these words and draw a line under this whole sorry episode by confirming they will not appeal this well-argued and comprehensive consideration of the case.
"John Reid (Home Secretary) has shown a willingness in recent weeks to apologise for the mistakes of others. I wonder if he will be big enough on this occasion to apologise for a mistake of his own."
Mr Carmichael said Makao owed his freedom to the campaigning of the Shetland population.
About 9,000 Shetland residents signed a petition backing Makao, and 2,000 added their names to an online campaign.
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