Raj Patel, a 38 year-old firefighter in Cumbria was the last remaining ethnic minority firefighter in the county. His colleague Dave Jackson, who had been the only full-time black fire-fighter in Cumbria, received damages last October after enduring years of racial harassment.

Mr Patel, a shopkeeper on Walney Island in Barrow who was a retained firefighter - a volunteer prepared to risk his life for the good of the community - endured racist jokes and discriminatory treatment. He did not complain because he feared it would harm his chances of becoming a full-time firefighter.

But when a colleague blew the whistle on What Mr Patel was going through at Walney Fire Station Mr Patel was bullied and threatened by his colleagues.

He was then rejected for a full-time post, in spite of the targets for ethnic minority recruitment in the Fire Service set by the Home Office.

Last year a report by the Fire Service chief inspector Graham Meldrum branded the entire Service's culture as racist and sexist. It called for substantial reform of the service's management and culture to allow greater equality and fairness to be integrated throughout the organisation. Mike O'Brien, under-secretary of state at the Home Office, gave Fire Service managers 18 months to deliver results. Mr Patel's case comes a year after that report.

The stress and ill-health caused by the treatment Mr Patel endured has forced him to give up his dream of becoming a full-time firefighter. He is also selling his shop and leaving the area.

Andy Gilchrist, general secretary of the Fire Brigades Union said: "In the light of the current Home Office policy to improve the representation of ethnic minorities in the Fire Service this is yet another sad indictment of the lack of commitment of chief fire officers and employers to match that policy. Employers consistently sign up to government initiatives and talk a fantastic game, yet we hear time and time again of cases like that of Mr Patel which show that little more than lip-service is being paid."

Stephan Cross, a lawyer for Thompsons Solicitors which represented Mr Patel said: "While we are obviously thrilled by this settlement, this is yet another case which exposes the scale of institutional racism in the Fire Service. The Home Office set targets for the recruitment of ethnic minority firefighters, yet here we now have a situation where there is not a single black firefighter in Cumbria. It is time the Home Office took tough action to show the Fire Service that it is serious in its determination to stamp out racism."