Lancashire County Council refunded Ian Abbot 325 for the cost of his daughter Laura's journeys to school. He wants 2,000.
Parents are eligible for travel subsidies for their children to attend religious schools but this does not apply to atheists sending children to non-religious schools.
The case was settled out of court and has not set a legal precedent, but Graham Lane, chairman of the Local Government Association's education committee, said it could lead to further claims.
The case could also influence the School Transport Act, which is passing through the House of Commons. A DfES spokeswoman said: "We don't comment on individual cases."
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