A former British National Party councillor who claimed race discrimination when he was sacked from his job now faces legal bills of £100,000.

Arthur Redfearn, 57, who represented Wibsey for two years, was sacked from his driver's job in 2004 shortly after he won a seat on Bradford Council.

He had been working for West Yorkshire Transport Service for seven months, driving vulnerable adults and children to schools and day centres. The company, run by Serco, said it considered Mr Redfearn a health and safety risk because many of his passengers and colleagues were Asian. It feared its buses could be targeted by abusive people opposed to the BNP's "whites only" views.

Disabled Mr Redfearn, who has an artificial leg, claimed his sacking amounted to racial discrimination. An employment tribunal upheld the dismissal but was later overruled by an appeals panel. Yesterday the Appeal Court blocked his claim and ordered him to pay Serco's costs, which could total £100,000.

Lord Justice Mummery said: "Mr Redfearn was no more dismissed on racial grounds' than an employee who is dismissed for racially abusing his employer, a fellow employee or a valued customer."

They refused him permission to appeal to the House of Lords, but he can still petition the law lords directly to hear his case.

He has now vowed to sue the Government at the European Court of Human Rights for failing to protect him against discrimination on the grounds of political beliefs.

His solicitor Philip Chapman said the former skills instructor and college lecturer, of Great Horton, had been out of work for nearly two years. Mr Redfearn's costs have been funded by supporters who have appealed for donations, including an appeal on the BNP website.

Mr Redfearn was dismissed in June 2004 after his employers discovered he had been elected as a BNP councillor a position he lost at this month's local elections.

David Pannick QC, for Serco, said the purpose of the race relations act was to protect people "against the racism at the heart of the political beliefs" held by the BNP.

Mr Redfearn said: "I am unable to make a full comment. I haven't seen the judgement."

e-mail: jo.winrow@bradford.newsquest.co.uk