An ex-Birmingham councillor has been awarded £122,000 after claiming he was deselected by Labour for being Asian.
Raghib Ahsan, a councillor in Sparkhill for seven years, won a legal battle to prove he was a victim of racial discrimination in November 2007.
He was deselected following claims he gave Asian families preference for housing repair grants in exchange for the promise of votes.
A Labour spokesman said discriminating by race was "totally unacceptable".
The spokesman for the party added: "We are clear that unfairly discriminating against someone because of their race is totally unacceptable, and this principle is embedded in our party rules."
Mr Ahsan claimed discrimination by a selection panel before the 1998 local elections.
That followed a Labour Party inquiry which found no evidence of impropriety by Mr Ahsan and other Pakistani candidates.
'Hurt and injustice'
The House of Lords accepted Mr Ahsan's appeal against a court ruling which rejected his claim he had been discriminated for being a Pakistani candidate in 2007.
It restored an employment tribunal's decision that found in his favour.
In a statement Mr Ahsan, who is now a solicitor, said the payout was "final vindication after all these years".
"The compensation is some recompense for the hurt and injustice I have suffered and the effective ending of my political career," he said.
"I have not been given any apology by the Labour Party."