The country's highest administrative court was ruling on the case of a man near Berlin whose licence was taken away after he was caught cycling with a blood-alcohol level four times the legal limit.
Medical tests found he was a heavy drinker and probably often in no state to cope with road hazards. The council appealed when a local court overruled the decision to revoke his licence.
Meanwhile other offences now look set to attract significantly stiffer sentences after Chancellor Angela Merkel's cabinet approved a raft of new measures aimed at reducing road deaths. A government spokesman confirmed that drink drivers could from 2009 face fines of up to €3,000 ($4,720), double the current maximum, and a penalty of €2,000 for jumping a red light.
The tougher laws, which also include higher fines for speeding, still have to be approved by parliament.
No change is planned to the lack of speed limit on many parts of the Autobahn.