The Department for Education confirmed today that it is seeking an appeal at the Supreme Court against the Court of Appeal ruling that Sharon Shoesmith was unfairly sacked following the Baby P tragedy.
The Court of Appeal ruled last month that Ms Shoesmith was unfairly sacked, and a leading employment lawyer said she could receive as much as £1 million if the decision was not overturned.
A DfE spokesman said: "The Government thinks that it was right in principle for Sharon Shoesmith to be removed from her post as Director of Children's Services."
He added: "Our initial application to appeal has been turned down by the Court of Appeal. We have now filed an application for permission to appeal to the Supreme Court."
The DfE's statement said: "The Government thinks that it was right in principle for Sharon Shoesmith to be removed from her post as director of children's services.
"The High Court thought that the decision was taken in a fair way. The Court of Appeal said (on Friday May 27) that they thought it was not sufficiently fair, and was therefore unlawful.
"There are questions of constitutional importance involved in this case, beyond the specific question about whether Ed Balls should have had a further meeting with Sharon Shoesmith before removing her.
"Our initial application to appeal has been turned down by the Court of Appeal. We have now filed an application for permission to appeal to the Supreme Court."
Ms Shoesmith's career was left in ruins after she was removed from her post in December 2008 by then education secretary Ed Balls and subsequently sacked by Haringey, which said it had lost trust in her.
The axe fell after regulator Ofsted published a damning report in the wake of 17-month-old Peter Connelly's death, exposing failings in her department.
Lawyers argued that Ms Shoesmith, 58, had been the victim of "a flagrant breach of natural justice" and that she had been driven from her £133,000-a-year post in December 2008 by a media witch hunt and political pressure.
They asked Lord Neuberger, Master of the Rolls, sitting in London with Lord Justice Maurice Kay and Lord Justice Stanley Burnton, to rule that her sacking without compensation was so legally flawed as to be null and void, and that she still remained entitled to her full salary and pension from Haringey up to the present day.
Allowing her challenge, the judges ruled that both Mr Balls and Haringey had acted too hastily and in a way that was "procedurally unfair" because Ms Shoesmith had not been given a proper chance to put her case.
Baby Peter died in August 2007 at the hands of his mother Tracey Connelly, her lover Steven Barker and their lodger, Barker's brother Jason Owen.
The little boy had suffered 50 injuries despite receiving 60 visits from social workers, doctors and police over the final eight months of his life.
A series of reviews identified missed opportunities when officials could have saved his life if they had acted properly on the warning signs in front of them.