Mr Maude, who served as a minister under Margaret Thatcher and John Major, said he regretted voting for the now-repealed Section 28, which banned councils from promoting homosexuality. "In hindsight a mistake, I voted for it, I was a minister," he said.
In an interview with the gay news website PinkNews.co.uk, Mr Maude said: "We've been seen for a long time as a party which hasn't been very open to gay people. That's wrong." Asked if it was morally wrong, he replied: "Yes, totally."
Mr Maude, whose brother, Charles, died of Aids in 1993, said: "This is all informed by my family, my wonderful, intelligent, beloved brother.
"The gay scene in London in the 1980s was quite aggressively promiscuous and I think if society generally and the government I served in had been more willing to recognise gay people then there would have been less of that problem."
He added: "A lot of people like my brother would not have succumbed to HIV and lost their lives."
The former Treasury and Foreign Office minister is trying to build bridges between the Conservative Party and gay people as part of a drive by the Tory leader, David Cameron, to modernise the party and broaden its appeal.
Mr Maude, a Thatcherite who became one of the party's leading modernisers and ran Michael Portillo's 2001 campaign for the party leadership, said: "I've been conscious that too many gay people who are Conservative-leaning have not felt comfortable to support us."
He insisted there were some genuine reasons for adopting Section 28 in 1988. "Some local authorities were actively promoting homosexuality to school children at a time when gay sex under the age of 21 was illegal. However, times have moved on and the Conservatives should have moved on with it much, much earlier and we didn't. A big part of our problem more generally was that we have failed to keep pace with change in society."
Mr Maude rallied to the defence of Simon Hughes, the Liberal Democrat leadership candidate, who was criticised for telling The Independent he was not gay and then admitting he was bisexual. I thought Simon's explanation for his secrecy was so real. He didn't want to rub his sexuality in the nose of his elderly mother. I can appreciate it," he said.
"We shouldn't criticise, that will change as time will go on. I hope we're becoming a society where all of this matters much less and the sooner it happens the better. People should be able to be more at ease with themselves."
The Tory chairman said Nicholas Boles, the party's candidate in the target seat of Hove at last year's general election, was told by a voter he canvassed: "I can't vote Conservative because I'm gay." Mr Boles replied: "I'm gay too." Mr Maude added: "The man appeared perplexed and claimed we're an anti-gay party, but that sort of perception is intolerable. However, we've begun to redress it."
In 2002, Alan Duncan became the first openly gay Tory MP, which Mr Maude said was a necessary move forward for the party. "Being a Conservative MP was by then virtually the only work environment where there were no openly gay people represented," he said. "It is a shame that people can't be open about sexuality but I don't think any of us should underestimate how hard it is to come out. Chris Smith [the former Labour cabinet minister] came out way back, more than two decades ago. That was a bloody brave thing to do especially in the 1980s."
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