A multi-millionaire aristocrat who saw his £4 million eco-home burnt to cinders on a castaway island has won a seven-figure damages claim against builders.

The Honourable Edward Iliffe bought Green Island in Poole Harbour, for £2.5 million in 2005 and planned to develop a luxury holiday retreat for his family.

But the dream went up in flames in April, 2012, when fire ravaged their cedar chalet as it approached completion.

Mr Iliffe, 45, and his wife, Teleri, 49, launched legal action against a firm involved in building the environmentally friendly pad, Feltham Construction Ltd, demanding £3.5 million in damages.

A top judge at London's High Court has now ruled that Feltham was indirectly responsible for the defective installation of a logburner or flue that caused the costly blaze and ordered the firm to cough up compensation.

Mr Justice Stuart-Smith said the six-bedroom solar-panelled home was in the final phase of construction, which included the fitting of a two-way log-burning stove with heat exchanger and stainless steel flue, when the fire ignited.

The logburner had been used for just two weeks, including by the Iliffe family who stayed at the chalet over Easter, 2012, when an electrical contractor reported hearing "funny cracking noises".

The blaze was discovered in the roof space at about 7am and, although 45 firefighters were ferried to the island, the house was "largely destroyed", the judge said.

The Iliffes and their three children, Alys, 17, Henry, 14, and Victoria, 12, were heartbroken by the blaze.

A forensic fire expert appointed by the family who examined the debris said the fire probably started "within the roof construction and specifically in that part of the roof close to the chimney".

His "strong view" was that combustible materials were closer to the chimney than the 50mm distance required.

But Feltham, which oversaw much of the green building's development, denied that the chimney was "assembled and installed in a non-standard and defective manner".

Feltham claimed it was not responsible as the flue and logburner were installed by a sub-contractor with whom it only placed an order on Mr Iliffe's behalf.

On the cause of the fire, Mr Justice Stuart-Smith said that, as it had never been suggested the logburner or chimney were inadequately designed, the Iliffes' case that installation flaws caused the fire was "overwhelming".

He ruled: "Feltham was responsible in contract for the acts and omissions of its sub-contractors".

The exact value of their damages award has yet to be assessed.