Inter‐turn short‐circuit fault of the stator winding is one of the most common faults of asynchronous generators and often found in doubly‐fed wind turbines. The improper treatment methods will lead to unnecessary power loss or further damage to the insulation layer. To solve this problem, an optimal power dispatch strategy (OPDS) is proposed which combines the control at the turbine level and the optimisation at the farm level. At the turbine level, the faulty turbine is down‐regulated based on the principle that the fault current does not exceed the rated current. At the farm level, particle swarm optimisation is used to optimise the power references considering wake effects to compensate for the power loss caused by the downregulated turbine. The effectiveness of OPDS is illustrated by comparing with two usually used strategies, one takes proportional dispatch strategy (PDS) and directly shuts down the faulty turbine, the other takes PDS but ignores the fault. The results show that OPDS can minimise power loss under the premise of protecting the faulty turbine. The study contributes to reduce the maintenance costs of wind farms and improve the operational capability of the wind turbine under fault conditions.