A landlady has lost a landmark legal battle in which she claimed up to £400,000 compensation after insisting passive smoking in her bar made her ill.

Michelle Muir, 44, said working at the New Derby pub, on Roker Bath Road, in Sunderland, had exposed her to so much smoke her throat was damaged.

She said depression and anxiety brought on by the illness had left her unable to work, and claimed her loss of earnings could add up to £396,413.

But the case was rejected at Newcastle Crown Court on Tuesday aftre doctors claimed damage to her throat was more likely to have been caused by having to raise her voice in a busy pub.

If Miss Muir, who lived at the pub, had won her case, it would have made medical history and opened the floodgates for thousands of similar cases.

In her statement to the court, she said: "I would find it difficult to return to work in any pub where smoking was allowed, as this would almost certainly aggravate my condition.

"I have also been diagnosed with severe anxiety and depression."

Solicitor advocate Fred Banning, representing Miss Muir, told the court ineffective ventilation in the smoky pub caused damage to her vocal chords, known as nodules.

After she first started to suffer sore throats, in early 2001, she underwent a series of operations, the first on her vocal chords in March that year, and another three months later.

In May 2002, she had a further operation, this time on her thyroid.

As a result of the surgery, it was claimed, she had to stop work in May 2002, before being dismissed by the New Derby's owners, Laurel Pub company Ltd, in March 2003.

The firm, and Miss Muir's previous employers Whitbread, admitted there had been a breach of ventilation rules, but argued the smoky environment would not cause illness.

They said medical evidence showed the nodules were caused by friction damage, possibly as a result of talking loudly while working as a manager in a loud and busy pub.

But Miss Muir, who earned around £22,000 a year and is a lifetime non-smoker, claimed the drying effect of the smoke would have contributed to her throat problems.

Mr Banning told the court: "It's like revving the engine without motor oil. The issue is what causes the damage, the revving or the lack of engine oil?"

Barrister David Platt, representing the pub companies, said evidence from consultant ear, nose and throat surgeon Hugh Marshall showed 90pc of vocal chord nodules were found in non-smokers.

He also said 50pc of people with the condition were aged under 10.

Rejecting the claim, Judge Christopher Walton said: "The problem is her vocal chord nodes did not arise as a result of inhaling cigarette smoke. The finding should be it did not happen."

Miss Muir, who did not wish to discuss the case, was ordered to pay the court costs.