A former housing officer made legal history yesterday when she was awarded more than #67,000 compensation for work-related stress.

Lawyers believe it is the first time that an employer has accepted liability for personal injury caused by stress in a British court.

Mrs Beverley Lancaster, 44, of Sutton Coldfield, West Midlands, successfully sued Birmingham City Council after falling ill with depression while working as a housing officer.

Yesterday, at the city's county court, assistant recorder Frances Kirkham said she accepted Mrs Lancaster's job had led to her psychiatric illness but said she believed the signs for a recovery were ''optimistic''.

After the hearing Mrs Lancaster said the ruling had vindicated her decision to bring the case.

''Everything I did was right, the council made promises to me and they failed me. I felt isolated, let down, that I was not good enough, not wanted,'' she said.

The mother-of-two, who joined the local authority in 1971 aged 16, added: ''I was a very loyal employee, but I believe loyalty works both ways and they were not very loyal to me.''

The court was told she worked full-time until her first child was born in 1988. After maternity leave she returned on a part-time basis, but had planned to return to full hours in 2001, when her youngest child began senior school.

The judge was told the problems began when, after more than 20 years' service, Mrs Lancaster was moved from the position of a senior draughtswoman and redeployed as a housing officer in a neighbourhood office.

Unison, the union which brought the case on her behalf, said the ruling sent a very strong message to employers.

Valerie Broom, regional secretary for the West Midlands, said: ''We hope today's award serves as a lesson to Birmingham City Council and to other employers that they cannot expect to get away with gambling with the health of their employees.''

q A former council worker has won an out-of-court settlement of #84,000 after claiming years of bullying and intimidation.

Mrs Cath Noonan, 53, had worked for Liverpool City Council for 11 years in the Social Services Department before retiring due to ill health in July 1997.

She was due to begin a claim for damages against the council for breach of duty of care in court in Liverpool tomorrow.

A spokesman for Liverpool City Council said: ''We confirm that a settlement has been made.''