Aishah Azmi lost her employment tribunal case for discrimination and harassment, but was awarded damages for victimisation by Kirklees Council.
Her legal representative said they will take the case to "a higher court".
But Dewsbury Labour MP Shahid Malik told the BBC: "I would appeal to Mrs Azmi now just to let this thing go. There is no real support for it."
It comes as Conservative leader David Cameron warned politicians to consider the effects before "piling" into the row on women wearing full-face veils.
Mr Cameron said he was concerned British Muslims were feeling "slightly targeted" on the issue.
Schroeder says Bush's religious talk worried him
By Erik Kirschbaum, Reuters, Berlin
Ex-German Chancellor Gerhard Schroeder has written in a new book that George W. Bush's frequent references to God in their meetings before the Iraq war had made him wary of the U.S. president's political decisions.
He said in "Decisions: My Life in Politics", published on Sunday in Der Spiegel magazine, he was alarmed by Bush's talk of God, which made him fear religion influenced decisions. He said he had no qualms with Bush's Christian faith but could not escape a fear religion was a driving force behind his decisions.
"I can well understand if someone is devout and strives for a dialogue with God, in this case prayer. The problem that I have with that starts when the impression arises that political decisions are the result of a dialogue with God."
Schroeder said the problem with decisions made in "dialogue with God" is they cannot be modified or negotiated. Bush broke off ties with Schroeder for a while after he publicly questioned the wisdom of invading Iraq as part of his war on terrorism.
"This absoluteness I saw in the American president in 2002, not only in our private talks but also in his public comments, reinforced my political scepticism - even though I personally like America and its president."
Schroeder wrote he believes in the separation between church and state.
"Quite rightly we criticise that in most Islamic states the role of religion in society and the secular character of the legal system are not clearly separated. But we haven't taken note as readily of the U.S. Christian fundamentalists and their interpretation of the bible that show similar tendencies.
"There is thus little scope for peaceful resolutions if both sides claim to have a monopoly on the only truth."
Kashmir protest over youth death
Several thousand people have protested in Indian-administered Kashmir against the death of a young man in custody.
Nineteen-year-old Mohammad Maqbool Dar was arrested by the Indian army at his home in Pakharpora, around 40km west of the capital Srinagar, but later died.
An army spokesman said Mr Dar had been arrested on suspicion of supporting Islamic militants in Kashmir.
The army says he was taken to hospital after he complained of feeling unwell and was declared dead by doctors.
Authorities are investigating the incident as a murder. His family says their son was tortured to death.
Father questions Madonna adoption
Yohane Banda said adoption services in Malawi had never told him the procedure meant that 13-month-old David would no longer be his son.
Mr Banda had previously said the adoption was for the best of his child.
David was flown to Britain to live with Madonna after a Malawian judge granted her a temporary order to take him.
Iceland 'breaks ban on whaling'
"One fin whale was caught today and will be landed tomorrow," a whalers' spokesman told Reuters news agency.
The move follows the country's announcement that it planned to resume commercial hunting of whales.
The announcement has angered conservation groups and anti-whaling nations, with some talking of a legal challenge.
The European Commission has urged Iceland to reconsider its decision.
Pictures courtesy of BBC News online.