Tower Hamlets Council has failed in a bid to have a landmark legal ruling against its “discriminatory” foster care policy overturned.

The council appealed a High Court decision which found that its policy of paying carers who are related to the children they foster less than those who are not was unlawful.

But the appeal was thrown out by judges in the Court of Appeal this month.

The woman who brought the case – who cannot be named for legal reasons – complained after being paid less than an unrelated foster parent would be for looking after three of her brother’s children, all of whom have learning difficulties.

Despite being blind in one eye, the woman gave up her job and moved house to care for the “demanding and exhausting” children at the request of Tower Hamlets Council.

She was by described by High Court judge Mr Justice Males as “one of the unsung heroines of our society”.

The local authority appealed March’s ruling that she should be paid the same as an unrelated carer would be, saying it wished to “clarify the issue”.

Speaking after the Court of Appeal threw out the council’s case, the woman’s lawyer, Rebecca Chapman, said: “It has been a long battle but I am absolutely delighted for my client.

“She will have enough money to be able to continue to care for the three very demanding children.”

The local authority said it was not the only one to interpret government guidelines in a way deemed discriminatory.

The ruling is set to pave the way for thousands of other carers across the country who look after relatives’ loved ones receiving up to double their present level of financial support.

A council spokesman said: “We are pleased that the regulations around payments to kinship foster carers have now been clarified and will amend our payment schemes accordingly.”

The council was unable to confirm how much money was spent pursuing the case.