London's pride as Mardi Gras showcases its drive to become gay capital of the world

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Philip Hensher: Gay Pride may be just a party, but it's still political

Leading article: A lot done, a lot still to do when it comes to gay rights

London is planning to overtake San Francisco and Sydney as the gay capital of the world in a tourism drive that could net the city £1bn a year from the "pink pound".

Today's Mardi Gras, the highlight of the gay calendar, will be the biggest to date, with hundreds of thousands expected on London's streets. If organisers get their way, it will become the biggest fiesta in the world in the most tolerant city on the planet.

After this week's announcement from Ken Livingstone, the Mayor, that the Greater London Authority (GLA) is to set up the London Partnerships Register as a push towards gay relationships being legally recognised, the homosexual community is on a high.

Gays are in a mood to celebrate, while more straight people than ever before are expected to watch the Mardi Gras Pride parade from Hyde Park and to attend the main event in Finsbury Park, north London, where 85,000 are expected to party.

The city's welcoming approach to the gay community has always been based on altruism. But now there is an unexpected spin-off: money.

Tourism officials estimate that gay visitors to London generate £800m in income. If Mardi Gras organisers succeed in their efforts to make the event even bigger – and they have the support of Mayor Livingstone – that figure could rise to more than £1bn over the next five years.

Jason Pollock, the Mardi Gras festival director, said: "London is rapidly becoming the gay capital of the world and it's getting bigger and better all the time – we may already be in the number-one spot.

"At the moment, the only thing limiting the size of London's Mardi Gras is the venue – if we could get somewhere the size of Hyde Park, we'd be able to overtake Sydney and San Francisco. I can see it happening over the next two to three years."

The success of the Mardi Gras is seen as one of the key reasons behind the growth in gay tourism. London's usual attractions are a big draw, but its unrivalled gay bar and club scene edges it ahead of San Francisco, while its proximity to Europe and America makes it a more attractive destination for travellers in the northern hemisphere.

As a result, the British Tourist Authority (BTA) and the London Tourist Board (LTB) have been quietly running canny campaigns aimed at attracting the pink pound. Why? The answer is simple. As Mr Pollock put it: "We might have a few dogs, but we certainly don't have any kids to spend our money on."

Three years ago, the BTA began focusing on gays in America in a bid to attract them to Britain.

"Through our research over there, we found out that there was this whole segment of 'dinkys' – dual income no kids – and 'sinkys' – single income no kids – who were not being catered for. Through our offices in the States, we began producing a brochure aimed at the gay community, not promoting gay attractions but alerting gay people to them, and we set up a website called www.gaybritain.org. It's been a terrific success."

BTA estimates from America suggest 400,000 gay people spent about £270m in Britain last year. London, however, attracts most gay tourism, drawing from within this country as well as abroad.

Alex Brannen of the LTB said: "We'd love to be the gay capital of the world. It's a big market and the people in it are, on average, more affluent than straight people with children.

"Most gays come for the same reason as straight people – the major exhibitions, theatre and the usual attractions. But there is the added value that London is a very tolerant and friendly city with a fantastic gay nightlife scene."

The Greater London Authority has grasped the importance of the pink pound. "There is no actual strategy for nurturing it, but [Mayor] Ken is on record as saying we recognise the contribution made to London life by the gay and lesbian community," a spokesman said. "The Mayor has said he would love London's Mardi Gras to rival Sydney and we will do anything we can to support its development."

Each Mardi Gras, since the first gathering under a different name in 1970 when only 2,000 brave campaigners marched, has a political theme. This year it is partnership rights, the desire among gays to have their long-term relationships recognised in the eyes of the law. Mayor Livingstone's register, although having no legal standing, has been seen as a positive gesture. Equally positive will be a mass blessing to be performed on about 600 couples by the Reverend Neil Thomas of the Metropolitan Community Church in Bournemouth in a tent in Finsbury Park.

"It will be a gesture of defiance, but there is a long tradition of defiance in the church," Mr Thomas said. "Gay and lesbian couples will exchange vows and promises.

"It is sure to be a very emotional event. For some of those involved, it will be the first time they have been able to publicly affirm their love for their partner. All the blessings will be recorded and stored by us. Like Mayor Livingstone's register, the blessings have no standing in law, but they can help in the future when, for example, proof is needed for immigration purposes."

Mr Pollock says the event is less political than it was, simply because of advances in the gay cause. "But we still have to have a political theme because gay and lesbian people still don't have equal rights to heterosexual people," he said.

"Labour have pledged to give us partnership rights in the life of this parliament; we just hope they keep their word. Wouldn't it be lovely if we could have a Mardi Gras when we have equal rights? We could forget the political theme and just enjoy the party."