The tribunal last week said Kirklees Council had not discriminated against her by insisting that she removed her veil during lessons at Headfield CofE junior in Dewsbury, Yorkshire.
However Mrs Azmi was awarded pound;1,000 for injury to her feelings on the grounds that the council had victimised her and failed to follow correct procedures. Nick Whittingham, Mrs Azmi's lawyer, said she was feeling tired and under pressure after the verdict.
"I expect she wishes it would all go away," he said. "She is obviously disappointed by the decision, but we have explained that losing at the first hurdle does not mean the whole thing is a done deal." Mr Whittingham said Mrs Azmi's barrister was considering what grounds they might have for an appeal, and it could be two or three weeks before they came to a decision. A Kirklees council spokesman said the decision that Mrs Azmi should remove the veil in the classroom was taken after lesson observations by the school's head and deputy head.
Jim Dodds, cabinet member for children services at the council, said the lessons were "visibly better" when Mrs Azmi took off her veil. "The school bent over backwards to find some kind of compromise," he said. "They even tried to change her timetable so she was not with any male teachers.
Unfortunately, this was just not possible."
Mr Dodds said he was happy for people to wear veils in the street. "This is not about religion or faith," he said "It's about education."
Kirklees' neighbouring authority, Bradford, has admitted drawing up guidelines on the wearing of veils in schools, many of which are attended by pupils from Pakistani origin families.
But a spokesman denied tabloid claims the authority had decided to ban teachers and students from wearing the niqab.
"Veils in schools, for staff and pupils, have never been an issue in Bradford," he said.