Dinner ladies who lost their jobs when school hot meals were scrapped have been told West Sussex County Council may have to pay redundancy after all.

An Appeals Tribunal in London ordered the council be held liable for repaying catering firm Castle View for the redundancy costs of 237 sacked dinner ladies.

Castle View employed the dinner ladies at primary schools across the county until September 1999, when the Tory-led council agreed to scrap the service in a bid to save £500,000 a year.

The council agreed to replace Castle View with Gardner Merchant, now known as Sodexho, which would supply cold meals.

Castle View argued it could not be held liable as it was the council which changed its policy, even though a tribunal ruled in October last year the firm was liable to pay up to £300,000.

Castle View is appealing against the decision and has said it could take its case to the European Court.

Rejecting an argument by Castle View lawyers that today's redundancy hearings at Brighton Employment Tribunal should be postponed until an appeal sorted out the issue of liability, High Court Judge Mr Justice Hooper said: "It is unfair to Castle View but it would be more unfair to individual applicants not to proceed."

Hugh Owens of Castle View said: "It has never been Castle View's intention that the dinner ladies and other meals staff should have to wait so long for the redundancy payments to which they were entitled.

"Castle View is pursuing its appeal over liability with vigour, with the confident expectation that in due course the courts will find in our favour and that West Sussex County Council will ultimately be made to pay this money."