A major test case over the stance health authorities take in paying for sex-change treatment is heading for the High Court.

Mr Justice Owen has given leave for an urgent challenge to be brought against the right of Shropshire Health Authority to refuse to pay for operations necessary to finalise sex-change treatment for a man identified in court as "K".

The man, a former Inland Revenue officer and father of two, claims that he is effectively a woman who has been forced to live in a man's body. He has already undergone extensive hormone therapy and psychotherapy and has been living as a woman as far as possible since 1988.

At the hearing at which leave was given the judge said the case should go to court as soon as possible. When it does it will be asked to rule that the health authority is in breach of the European Equal Treatment Directive and the 1976 Sex Discrimination Act. It will be argued that it is unlawful for any health authority to impose a blanket ban on funding for sex-change operations.

The case is expected to have major implications for a number of other health authorities operating similar policies in respect of payment for this sort of treatment. Solicitor Madeleine Rees, who is acting for the man at the centre of the case, said she believed at least 15 health authorities were guilty of implementing policies of this sort.

She claimed that, apart from the psychological damage suffered by the people seeking treatment, the policy was a false economy because, in the long run, it was cheaper for health authorities to provide the full treatment rather than to pay the cost of treating the continuing problems suffered by those such as K.