A transsexual will take her former employer to tribunal next week seeking half a million pounds in compensation under the Sex Discrimination (Gender Reassignment) Regulations 1999.

It is believed to be the biggest discrimination case involving a transsexual.

Jessica Bussert, formerly Josh, is seeking £500,000 compensation from Hitachi Data Systems claiming she was demoted after surgery to “feminise” her face and breasts, since moving from the US state of Indiana to work in here.

The 41 year old, who is yet to have completed the surgery, was a principal consultant for the company earning £88,000 a year, but after jokingly telling the manager, Steve Larkin, she was considering a sex change, Mr Larkin said: “Don’t do that to me, Josh. I had to work in an office with someone who did that once and it was weird.”

She said she was demoted after facial and breast surgery in March 2005, and no longer reported to Mr Larkin, who later allegedly issued a negative appraisal.

This resulted in Ms Bussert taking sick leave for “stress causing clinical depression, with anxiety and panic disorder” in September 2005, returning three months later, but then from February 2006, the company allegedly stopped paying him when he returned to sick leave.

She moved to London in April 2004 after living in a transphobic environment in Indiana, with her wife Sharon and two of her three children from a previous marriage, as well as two adopted girls, after being diagnosed with gender dysphoria in 2003.

She has since been deported back to Indiana after her work permit expired.

Hitachi denies the allegations.

The case will start on Monday and is expected to last 10 days.