US investment bank JP Morgan is to sponsor the annual gay equality dinner, organised by Stonewall, the gay rights campaigning group.

The move is the latest by London's financial heartland, the City, to try to dispel its conservative reputation.

Many City banks now fear that this reputation may deter high-calibre candidates from applying for jobs.

Joseph McHale, head of JP Morgan's operations in Europe, the Middle East and Africa, said in the Financial Times: "We are committed to attracting and retaining the best people from a broad and diverse pool."

The dinner will be held at the Savoy Hotel, on 30 March and is an annual event to demonstrate support from business and political leaders.

Stonewall has welcomed JP Morgan's sponsorship.

"Because London is JP Morgan's European headquarters, it sends positive signals that financial institutions support gay and lesbians and the broader fight for equality and recognition," Steve Mannix, in charge of fundraising for Stonewall, said.

Last year, NatWest sponsored the dinner, but decided against sponsoring it this year, amidst general cost-cutting in the face of its ongoing takeover battle.

Discriminating City

JP Morgan's decision follows a series of high-profile discrimination cases in the City.

JP Morgan itself last hit the headlines when former employee Aisling Sykes claimed she was discriminated against because she was a mother.

She was awarded £12,000 for being sacked without warning from her job as vice president.

Deutsche Bank is expected to pay substantial damages for sexual discrimination to a City of London woman executive.

A tribunal found that Deutsche Bank sexually discriminated against Kay Swinburne because it failed to prevent what it called a "hostile environment".