A gay rights activist has called for a boycott of the bus and rail group Stagecoach over its chairman's support for a law banning the promotion of homosexuality by local authorities.

Brian Souter is donating up to £1m to the Scottish School Boards Association, which will launch a campaign next week against the repeal of Section 28 of the Local Government Act 1986.

Mr Souter, a devout Christian, has denied being homophobic, but gay rights group Outrage! criticised his donation and urged a boycott.

Outrage! spokesman Peter Tatchell said: "He is behaving like the business leaders in the deep-south of America who funded the 1950s campaign to maintain racial segregation.

'Bigotry bad for business'

"I hope commuters, trade unionists, churches, politicians and companies that support gay human rights will boycott Stagecoach.

"Anyone who travels with Mr Souter's company is indirectly helping to finance his campaign in support of the discrimination.

"Bigotry is bad for business, as the Bank of Scotland discovered to its cost last year.

"Mr Souter's profits will tumble if he goes ahead with this plan to defend Section 28."

"The repeal of Section 28 is essential in order to tackle the bullying of gay pupils and to promote understanding and tolerance."

'Issue of democracy'

Mr Souter's spokesman David Macauley said: "Mr Souter believes that this is an important issue of democracy. It is not homophobic.

"It is essential that all Scottish parents realise what the implications are of scrapping Clause 28 and the kind of explicit material which could then be forced on their children in the classroom."

The money is coming from the Souter Foundation, a charitable organisation of which Mr Souter is a trustee.

An exact figure has not been disclosed but it is known to be more than £500,000.

SSBA treasurer Alan Smith said: "The vast majority of parents, I don't think really understand the potential for risk and harm to their children."

Mr Smith said the association regarded the repeal of Section 28 as "an issue of democracy".

"Parents and teachers act as protectors of children's rights. We feel we should be allowed to use our democratic right for consultation and debate with Scotland's new 'listening' government.

'No consultation' claim

"We feel that Section 28 should not be repealed but we were never consulted about it. We were told it was going to be repealed and then there would be a review of the guidelines."

The SSBA is to present its submission opposing the lifting of the ban to the Scottish Executive next Wednesday.

But a Scottish Executive spokesman said: "The executive is determined to get rid of this law which legitimates intolerance and discrimination."

An SNP spokesman said: "Mr Souter is entitled to his own opinion but the SNP's position is that Section 28 should be repealed as soon as possible.

"The majority of Scottish people feel that it is just discrimination and is a blight on Scottish society."

Tories back Souter

Scottish Tories' education spokesman Brian Monteith backed Mr Souter's stance, saying: "I very much welcome his decision to publicly declare his opposition to Section 28.

"It is a brave decision in a politically hostile climate and he is expressing his concern as a parent who goes to a state school.

"I think there will now be a level playing field for a debate on the issue.

Monsignor Tom Connelly, spokesman for the Catholic Church in Scotland, said Mr Souter's action "reflects a fear that is clearly shared by parents across Scotland".

He added: "No one condones bullying of anyone, whether it be racist or homosexual. What people are afraid of is that repealing Section 28 will openly promote homosexuality."