It was JP Morgan's "Pride" campaign and its unforgettable "Only Gay In The City" posters that helped pave the way for more sexual tolerance in traditionally white, male heterosexual City circles. But in the two years since the campaign ran, much has changed, says Sasha Scott, managing director of Inclusive Diversity, which specialises in diversity training inside financial and legal firms.

"Larger investment banks have proved very keen to tackle the area of diversity with their own internal networking groups and recruitment campaigns," she says, "and I don't believe that the only driver is the legal compliance issue or the fear of multimillion pound lawsuits from disgruntled ex-staff.

"It is also because the banks need to attract and retain the very best talent in the country and in many cases, they need to prove to their diversity-oriented client base that they are doing something concrete about the issue too."

The appearance of names such as Ernst & Young, Barclays, Credit Suisse and Goldman Sachs on the Stonewall Diversity Champions list – a good practice forum for big employers – is to be applauded. Barclays, for example, includes transsexual and gender reassignment guidelines in its long list of diversity policies, as well an LGBT support network, Spectrum. "Diversity touches upon everything we do as a business, from shareholder value, employee well-being, customer satisfaction and loyalty, to our contribution to and reputation in the communities we serve," says John Varley, Barclays' group chief executive.

But despite the work done by HR departments, women, it seems, are lagging behind men when it comes to declaring their sexuality in the workplace.

"In the past eight years, I've trained 12,000 City staff in all manner of diversity issues and it is clear that gay role models at the top of the organisation can be invaluable in shifting attitudes and paving the way for general acceptance," says Scott.

"Yet while there is clearly a fear among many lesbians that coming out will significantly harm their career prospects, this fear is not always shared by senior men. We need to find ways to encourage gay women in senior roles to be more open if we aren't to impose yet another ceiling on women's ambitions."

While it would be easy to blame Queen Victoria for the disparity – after all, she didn't believe that lesbianism existed and personally intervened in the law-making process to have a reference to "gross indecency between women" omitted from the Criminal Law Amendment Act of 1885 – it has also been suggested that in some circles, being male and out can be a distinct career advantage.

"In the City, as anywhere else, lesbian women face the double whammy of not only being female, but also being homosexual," says Ian Johnson, founder of Out Now Consulting. "In very macho banking circles, there may be a growing tolerance towards out males, but as long as lesbians are viewed as little more than a turn-on for straight men, it is hardly surprising that women who want their career ambitions to be taken seriously are reluctant to come out.

"If you are out to everyone, or out to no-one, at least there is a single position for you in your social interactions at work. When you conceal your sexuality, usually for career-related reasons, everybody loses out." Scott believes that in those organisations where there are no, or only a small number, of out role models of either sex, the notion of "straight allies" can be of great benefit.

"We work with many firms where the straight leadership are keen to take a proactive role in encouraging diversity and making sure that gay people don't feel alienated.

"Knowing that your managing director is vocal about and supportive towards bringing gay people into a previously heterosexual business culture can make an enormous difference if you want to come out and hopefully, that applies to women as well as men."

There is no doubt that high profile and out City leaders, such as Tim Hailes, managing director of JP Morgan, and KPMG board member Ashley Steel are helping to change attitudes.

But David Shields, director of workplace programmes at Stonewall, warns against firms composing a pecking order of diversity issues.

"In less liberal business environments, embracing diversity in all its forms is a way of differentiating yourself from your rivals and becoming an employer of choice. Firms that recognise the need for greater diversity tend to be better in all areas of diversity and not just the more obvious ones."