Police forces are being encouraged to monitor officers' sexuality to help meet the needs of gay policemen and women and create more openness.
Charles Clarke said there was a case for sexuality hate crime laws
The call was made by the Gay Police Association following pilot schemes in which staff were asked anonymously about their sexual orientation.
The move was part of a plan to combat discrimination within the police.
The findings were presented at the European Gay Police Association conference in London.
In the pilot scheme, police officers and civilian staff in three forces - Bedfordshire, Lancashire and Leicestershire - were asked in a survey if they were gay, lesbian, heterosexual, bisexual or would prefer not to say.
The GPA said the results of the pilot scheme were promising because some staff felt able to say they were not heterosexual and only a small proportion refused to answer.
All new police recruits are asked about their sexuality under measures introduced last year, but the pilot is aimed at those already employed.
The GPA, which was set up in 1990, aims to promote equality and improve relations between the police and gay community.
Soho bombing praise
It is now recommending the surveys are introduced nationally.
Speaking to delegates, Home Secretary Charles Clarke said the monitoring of sexual orientation would be a major step towards equality within the service, and would increase public confidence.
"If we are going to tackle crime then our police service has to have people who understand, from their personal experience, every community in this country," he said.
The GPA was formed in 1990 by a handful of London officers
"This is not about political correctness, it's far more important than that."
The home secretary praised the GPA for the "invaluable contribution" it has made to the investigation of homophobic crimes such as the Soho pub bombing in 1999.
"Homophobia is a very nasty state of mind. It has to be addressed in a very explicit way," he added.
During questions, Mr Clarke said there was a "powerful argument" for new legislation on hate crimes committed on the grounds of sexuality in the same way they had been put in place on race, and were being considered for religious hate crimes.
Inspector Sian Lockley, of the GPA said monitoring would be a step towards making the service more diverse.
Denying positive discrimination was being implemented, she said: "There is positive action to try to redress the balance of the negative treatment that we already we get."
An existing "hierarchy of minorities" in the police service meant race, gender and disability currently took precedence over sexual orientation, Insp Lockley told BBC News.
Martin Stuart, acting Chief Constable of Bedfordshire Police and representative of the Association of Chief Police Officers (Acpo), which backed the scheme, said they had a duty to ensure all staff were treated fairly, with respect and free from discrimination.
"If therefore, we both fail to recognise the existence of gay, lesbian and bisexual staff, and, worse still, fail to identify the extent to which they are suffering discriminatory behaviour or harassment within our organisations, we are failing in our duty of care."
Metropolitan Police Chief Sir Ian Blair and gay rights campaigner Peter Tatchell will address the conference on Friday.