The court of appeal has overturned a controversial judgment that children under the age of 16 considering gender reassignment are unlikely to be mature enough to give informed consent to be prescribed puberty-blocking drugs.

Tavistock and Portman NHS foundation trust, which runs NHS England’s only gender identity development service (GIDS) for children, challenged a high court ruling last year in a case brought against the service by Keira Bell, a 24-year-old woman who began taking puberty blockers when she was 16 before detransitioning. The other applicant was the unnamed mother of a teenage autistic girl on the waiting list for treatment.

The three high court judges had also said the doctors of teenagers under 18 may need to consult the courts for authorisation for medical intervention. As a result of the decision, the Tavistock suspended new referrals for puberty blockers and cross-sex hormones for the under-16s.

However, in a judgment handed down on Friday, the lord chief justice, Lord Burnett, Sir Geoffrey Vos and Lady Justice King said it had been “inappropriate” for the high court to issue the guidance.

They said: “The effect of the guidance was to require applications to the court in circumstances where the divisional court (a branch of the high court) itself had recognised that there was no legal obligation to do so. It placed patients, parents and clinicians in a very difficult position.

“In practice the guidance would have the effect of denying treatment in many circumstances for want of resources to make such an application coupled with inevitable delay through court involvement.”

Liberty, which intervened in the appeal, called it “a positive step forwards for trans rights in the UK and around the world”.

The appeal court judges stressed that it was established legal principle that “it was for clinicians rather than the court to decide on competence [to consent]”.

The Tavistock had argued that the high court ruling interfered with the entitlement of children to make decisions for themselves and was based on “partisan expert evidence”.

The appeal court judges said none of the expert evidence produced by the claimants complied with the relevant rules “and a good deal of it is argumentative and adversarial”.

Referring to a Care Quality Commission report from January that was critical of GIDS, including in relation to aspects of obtaining consent before referral, the appeal court judges said: “The fact that the report concluded that Tavistock had, in certain respects, fallen short of the standard expected in its application of the service specification does not affect the lawfulness of that specification; and it would not entitle a court to take on the task of the clinician.”

They concluded: “The divisional court concluded that Tavistock’s policies and practices … were not unlawful and rejected the legal criticism of its materials. In those circumstances, the claim for judicial review is dismissed.”

The Tavistock welcomed the decision and said it was committed to improving the quality of care and decision-making for patients in what was a complex field.

A spokesperson said: “The judgment upholds established legal principles which respect the ability of our clinicians to engage actively and thoughtfully with our patients in decisions about their care and futures. It affirms that it is for doctors, not judges, to decide on the capacity of under-16s to consent to medical treatment.

The NHS said a review would continue “to confirm whether clinical decision-making has followed a robust consent process”.

Bell said she planned to seek leave to appeal to the supreme court, adding: “A global conversation has begun and has been shaped by this case. There is more to be done. It is a fantasy and deeply concerning that any doctor could believe a 10-year-old could consent to the loss of their fertility.”

Cross-sex hormones are only prescribed from the age of 16 and experts say puberty blockers do not cause infertility.

Mrs A, the other claimant alongside Bell, said: “A child experiencing gender distress needs time and support – not to be set on a medical pathway they may later regret.”