The Inland Revenue's Solicitor's Office has been accused of "institutionalised racism" by an employment tribunal.
The tribunal's damning indictment came as it found the department guilty of racially discriminating against black barrister Marlene Morgan. It was ordered to pay u6,681 for lost earnings and emotional distress.
Morgan, who claims she has been unfairly treated since she joined the Revenue nine years ago, is taking her case to tribunal after she was again overlooked for promotion to senior legal officer.
Her boss told her: "There are blue-eyed boys and blue-eyed girls and you're not a blue-eyed girl."
She was eventually promoted to senior legal officer in July 1998 - six months later than if she had not been discriminated against, the tribunal decided.
The tribunal said: "There appears to be institutionalised racism in the department. The department, run by old, white university-educated persons, had a practice based on values which did not wholly embrace ethnic minority lawyers."
The tribunal singled out Margaret Shearer, Morgan's line manager, for particular criticism, saying: "It is clear from her background and education that she regarded the applicant (Morgan) as 'an average lawyer' and the way in which she gave evidence to us had an air of patronisation and arrogance."