Ms Villalba's 'Sexism in the City' case rumbled on for seven months

Lawyers Lewis Silkin, who led the case for Stephanie Villalba, confirmed that an appeal had been lodged.

Ms Villalba, a senior banker at the US group's London office, lost her claim of sex discrimination at a UK tribunal.

Allegations of unfair dismissal were upheld. Compensation for these claims have yet to be decided.

Lawyers have estimated that the partial victory is likely to result in a payout of no more than �100,000 - a fraction of the legal cost of the case.

The case - the biggest claim heard by a UK employment tribunal - had been seen as something of a test case for similar discrimination claims in the male-dominated financial services industry.

Victimisation

Ms Villalba was made redundant from her post in Merrill's global private client business in 2003 after 17 years at the company.

Merrill Lynch said she was removed because of the group's extensive losses on the continent, which had resulted in the division losing about $1m a week.

It also said that she lacked the leadership skills to turn the unit around.

During the employment tribunal in December last year, Ms Villalba accused the US investment bank of being "institutionally sexist".

However, the tribunal dismissed that claim as well as one of unequal pay in its December ruling.

It upheld Ms Villalba's claim of victimisation on certain issues, including bullying e-mails in connection with a contract, but said it had found no evidence of a "laddish culture" at the bank.

The tribunal also found that Ms Villalba had been unfairly dismissed because, having been removed from a senior post, she was entitled to wait to see if a suitable alternative position could be found in the organisation.

James Davis, the Lewis Silkin lawyer who led her case, confirmed on Wednesday that an appeal was going ahead.

The appeal can only be based on legal issues and cannot challenge the tribunal's finding of facts.

Merrill Lynch declined to comment.