Gay figures, including the comedian Julian Clary and the actor Sir Ian McKellen, senior politicians and gay rights campaigners have attacked the Government for refusing to ban what they see as "outrageous" and "disgraceful" bigotry.
Last week, The Independent on Sunday highlighted the case of David Allard and Bryn Hughes, a couple from Basingstoke, who had been refused a double room at a guesthouse. VisitBritain, the tourist board, decided to review its code of conduct but it remains legal for hoteliers to refuse a room on the basis of sexuality.
Television presenters Colin McAllister and Justin Ryan and business figures, including the former chairman of the Institute of Contemporary Arts, Ivan Massow, have backed the campaign to change the law. So have Labour figures such as former cabinet minister Chris Smith and Lord (Waheed) Alli.
The brutal killing of 24-year-old Jody Dobrowski on Clapham Common last week added to the clamour for a change in the law. Lord Alli argued that a failure to end homophobia in the goods and service sectors would reinforce discrimination against lesbians and gay men in wider society.
The Government's Equality Bill, which will go before the Commons next month, will make it illegal to discriminate against religious groups in the goods and services sector. But despite a 2005 election manifesto commitment to introduce similar legislation preventing discrimination against lesbians and gay men, the Government has so far refused to amend the Bill.
Backbench Labour MPs say they will table an amendment in the Commons and insist it be accepted. The Government now faces the prospect of its first Commons defeat since coming to power. Labour business managers are concerned that if Tory MPs are given a free vote, Labour's majority of 67 could be overturned. At best, the Government fears it will have to rely on Conservative votes to ensure the Bill's passage.
More than 100 MPs have signed an early day motion calling for anti-discrimination measures for religious beliefs to be extended to sexuality. Although most are Labour MPs, the motion has received support from front-bench Liberal Democrats and Tory John Bercow.
Angela Eagle, deputy chair of the Parliamentary Labour Party, said the Government should not underestimate MPs' determination. "In the 21st century, should someone be deprived of a hotel room or be stopped from renting an apartment because of their sexual orientation?" she asked. "It is a no-brainer." Ministers were sympathetic, she said, "but we want more than sympathy".
Many of the MPs who have signed the motion have never voted against the Government before. Ms Eagle has voted against the Government only once.
MPs claim the major stumbling block is the civil service. Desmond Turner, who proposed the early day motion, said: "Civil servants are being bloody awkward."
The Secretary of State for Trade and Industry, Alan Johnson, who has cabinet responsibility for the legislation, is understood to be in favour of changing the law now, but civil servants are said to believe it will take two years before legislation is ready.
Ben Summerskill, chief executive of the gay rights lobby group Stonewall, said there was no reason why the Government should not amend the Bill. "These protections are urgently needed and could easily have been inserted in the Bill by officials at any point during the past six months," he said. "It is understandable that many MPs are horrified at the prospect that they may be instructed by the Government to go into the same division lobby as Ann Widdecombe to vote against gay equality."
"I was indignant after reading about this in last week's 'IoS'. I didn't think it went on nowadays"
Julian Clary, Comedian
"The problems of discrimination happen today. They will happen tomorrow and the day after that "
Chris Smith, Former Cabinet Minister
"Homophobia is seen to be the last legitimate form of discrimination. People are terrified "
Ivan Massow, Businessman
"That such discrimination is still lawful can only reinforce discrimination in wider society "
Lord Alli, Labour Peer
"The Government doesn't see the Equality Bill as the right vehicle to bring change. But we have to outlaw it "
Michael Cashman, Labour MEP