Partingdale Lane will remain closed for the time being after a High Court judge ruled that Barnet Council had reopened the road unlawfully.
Judge Rabinder Singh quashed the traffic orders that reopened the former rat-run' between Mill Hill and Woodside Park last December.
He also criticised Tory councillor Brian Coleman for deciding on the closure last August before any public consultation had taken place.
"The law does not regard such an exercise as consultation as going through the motions," he said on Wednesday.
"I am satisfied on the evidence before me that Councillor Coleman had himself gone beyond a legitimate predisposition. Councillor Coleman did not have an open mind."
Judge Singh left the door open for the council to try again to reopen the road. But he expressly banned Mr Coleman from any involvement in such a decision.
Defence counsel Nathalie Lieven had argued that Barnet Council officers had taken the final decision to re-open the lane last November after consultation had taken place, but Judge Singh said that was no defence.
"They could not sustain an objection [to the re-opening of Partingdale Lane] without referral to Councillor Coleman. Consultation requires that such a decision delegated to an officer be taken in consultation with the relevant member of cabinet," he said.
Mel Simpson, a member of the Partingdale Lane Residents' Association, which brought the case, said they had argued the lane is not safe for pedestrians to use when it is open to speeding traffic.
"I have put so much time into this. I was really on the edge of my seat whether the judge would make this decision. As parents, we have been fighting for our children. All this is for them really," he said.
Labour group leader Phil Yeoman said Mr Coleman, cabinet member for the environment, should resign.
"He has ignored the wishes of residents, ignored the wishes of the opposition and now been told by the judge [his actions have been] unlawful," he said. "I think we have to seriously consider his ability to function in his position."
A council spokesman said: "We are disappointed at this outcome. We have worked with local residents to ensure that the lane is safer, and imposed a speed limit and weight restriction. Once we have studied the judgement, we will decide how to proceed."
The council has been ordered to pay costs estimated to be more than £50,000, and was also granted leave to appeal.