Thousands of claims of sexual discrimination and unequal pay could be brought against local authorities across the country after an appeals court in the north-east ruled in favour of two workers who argued they earned less than their male colleagues.

The arguments centre on the 'pay protection' schemes introduced by many local councils and NHS trusts to guard against the possibility of male workers having to take a pay cut as their wages were brought in line with their female colleagues.

However, according to the female workers, and now the appeal courts, such a policy simply meant that women have missed out on years of 'top-up bonuses' paid to men doing the same work.

Given the result, warnings of the 'equal pay timebomb' facing local authorities have once again emerged, with the government having given the green light for councils to increase their borrowing levels in order to deal with backdated claims, believed to now total around £3 billion.

Lawyers working for the north-east authorities involved in this latest case have confirmed that they will take a further appeal to the House of Lords, citing the potential implications of the ruling for the public sector.