Two senior female council staff who say they were passed over for promotion because of their sex had their compensation hopes dashed by the Appeal Court yesterday.

Julie Karen Wheeler, 39, of Belle Vue Avenue, Newcastle, and Hazel Newton, 52, from Durham, were senior architects employed by Durham County Council during a reorganisation in 1998.

Both applied for a vacant post as section manager of the council's environment and resources division, but the job went to a man, aged 33, who their lawyers argued had less experience.

The women's sex discrimination complaint against the council was dismissed by an employment tribunal in 1999, but the decision was reversed in January last year by the employment appeals tribunal.

But after a long legal battle, the council's appeal against that ruling was allowed yesterday by the Master of the Rolls, Lord Phillips, sitting at London's Civil Appeal Court with Lord Justice Pill and Lady Justice Arden.

The women, who were backed by their trade union, Unison, were ordered to pay legal costs.

Allowing the council's appeal, Lord Justice Pill ruled: "I have examined the decision of the employment tribunal in great detail and their final conclusion cannot be faulted. There is no doubt in my mind that they asked themselves the correct questions."