Corrosion protection by lanthanum hydroxy cinnamate (La(4OH-cin) 3) in a polyurethane based varnish coating for mild steel has been investigated. Filiform scribe tests, energy-dispersive X-ray spectroscopy (EDXS) and potentiodynamic polarisation (PP) techniques have been powerful tools to better understand the corrosion process at defects and under the coating. Filiform scribe tests showed that La(4OH-cin)3, as a pigment in a coating, inhibited the initiation and propagation of both delamination and filiform corrosion (FFC) on coated steel. The PP experiments provided an insight into the fundamental mechanism of FFC. The results suggest that La(4OH-cin)3 behaves as a mixed inhibitor and stifles the initiation and propagation of FFC. In this paper, the theory of delamination leading to FFC and the likely mechanism of inhibition by the La(4OH-cin)3 will be discussed.