Southampton City Council has lodged an appeal after it was told taxi drivers must not use CCTV in their cars.
Since 2009, all taxis in the city have been required by the council to record video and audio on cameras.
In July the Information Commissioner’s Office (ICO) ordered the council to halt the use of cameras, saying it breached the Data Protection Act.
The authority says CCTV helps protect the safety of both passengers and drivers.
The council’s deputy leader Jacquie Rayment said: “What has not been acknowledged in the process so far is the lengths we go to to protect the privacy of all drivers and passengers.
“No one sees these videos unless there is an incident that needs investigating and in those cases the footage and audio becomes crucial independent evidence.
“The very fact that the cameras capture everything is a valuable deterrent against attacks, both verbal and physical.”
The appeal is expected to be heard in spring 2013. A council spokesman said: “Until then the status quo will remain, with Southampton’s taxis continuing to be required to use the camera equipment.”
An ICO spokesman said: “We have received notice that Southampton City Council have appealed against the enforcement notice served on the council on 23 July and will consider our response.”