David Morgan, 36, a former security supervisor at a block of council flats, said he was a victim of anti-homosexual discrimination when he worked for Labour-controlled Haringey Council.
Mr Morgan, from Ilford, Essex, who has lost his home and car in the course of his three-year fight against the council, claimed he was wrongfully dismissed from his pounds 15,000-a-year job because colleagues told him they did not wish to work with gay people who were HIV-positive.
He started working for Haringey in January 1992 as senior concierge and security supervisor at a housing block on a small estate in Wood Green, north London. He quickly clashed with another concierge, who became abusive when he found out Mr Morgan was gay.
Mr Morgan invoked the council's disciplinary procedure to have the man suspended, and the colleague was disciplined for gross misconduct. But days after this judgement was served, Morgan himself was sacked.
Haringey said he was incompetent. It was alleged he needed too much supervision, he failed to act on instruction and he had developed poor working relationships with other members of staff.
Because he had only worked for the council for six months, 18 months short of the statutory minimum period required to claim unfair dismissal at an industrial tribunal, he was forced to take his case before a court.
In his fight with the local authority, Mr Morgan, who now keeps his home address secret, argued that competence was not the issue and pointed to a string of irregularities in his case. Not least among these, he argues, were vague allegations that he had been "inappropriately overt" about his sexuality.
Yesterday, after accepting the money, paid into Central London County Court by the council, which still denies liability, He added: "I feel that I have had a moral victory and I feel the council has admitted liability.
"I hope it encourages other people to the same thing. It has taken three years but it was worth it because maybe it will stop other unscrupulous employers from discriminating against gay people. It is still not illegal to discriminate against people on the grounds that they are gay.
"I just hope that Haringey Council has an investigation into the whole affair. It has cost the council about t pounds 40,000 to fight this case against me. I won't see a penny of the pounds 2,100 it paid into court because it will all be taken up with legal fees."
He added that, as a Labour Party member he would like to see an investigation at national level into discrimination against gays by Labour councils. "It makes my blood boil when I see Tony Blair stand up at conference and say he says he won't tolerate discrimination. I'd like to see him turn to the leader of Haringey Council, Toby Harris, and say "I want an investigation.
"I'm happy, but still unemployed."Reuse content