A senior banker who brought a landmark case against one of the world's best-known investment banks was not the victim of gender discrimination, a tribunal ruled yesterday.

Stephanie Villalba, 42, a former executive at Merrill Lynch, had been seeking more than £7 million damages after alleging she was "victimised" by managers and forced out of her job in 2003.

The married mother-of-three, who had been the firm's head of private client business in Europe, made complaints of sex discrimination, unfair dismissal and unequal pay at an employment tribunal which began in Croydon in June.

A Department of Trade and Industry spokesman confirmed the panel had dismissed her claims of sex discrimination and unequal pay but had ruled she was subjected to unlawful victimisation and had been unfairly dismissed.

He said: "We have considered each allegation - both those set out in the allegations document and the pleadings - and find that Ms Villalba was not less favourably treated on grounds of her sex in respect of each complaint relied on."

Merrill Lynch spokesman Michael O'Looney said: "This is a major victory. We are pleased that the tribunal agreed with our case and dismissed Ms Villalba's claims of gender discrimination, unequal pay and the substantial points on victimisation.

"We said from the start that this case was about performance, not gender. Ms Villalba was removed by the very same person who had promoted her into the position and who then replaced her with another woman."