The treatment of the gay priest forced to reject the post of Bishop of Reading was 'institutionally homophobic', the leader of the town's Labour Party has said.
Dr John has been with his partner for 27 years
Stuart Singleton-White, chairman of Reading Labour Party said they felt very strongly about the "homophobic and bigoted" treatment Canon Jeffrey John received.
Dr John, who has been with his partner for 27 years, bowed to pressure from members of the Anglican church not to take up the post, appointed by the Bishop of Oxford, earlier this month.
He said he made the decision because of the "damage" his consecration might cause to the "unity of the Church".
Mr Singleton-White said the ensuing media glare over the issue had brought national and international attention to Reading in a most unwelcome way.
"Reading is a place of cultural, racial and sexual diversity and a town where we welcome people from all religions and none," he said.
"The town has benefited hugely from the diversity and we believe Canon Jeffery John would have been been a real asset to Reading as its Bishop.
"Canon John's resignation resulted from a form of institutional homophobia, akin to the institutional racism in public bodies described and condemned by the Macpherson report.
"This was unacceptable and we are submitting a resolution to the Labour Party's annual conference suggesting that if this is going to be the behaviour of the established church then it is time the relationship between the church and the multi-cultural state that is modern Britain was reviewed."
Dr John spoke out recently for the first time since withdrawing his candidacy, in a letter to the people of Reading printed in a local newspaper.
He said he had been "saddened and disappointed" not to become bishop of the Berkshire town, and thanked the public for an "avalanche of kindness" shown towards him.
Hundreds of local well-wishers had written to him, including a number who wanted to leave the Church in protest at his exclusion, he said.
The Archbishop of Canterbury, Dr Rowan Williams, has said homosexuals were "full and welcome members of the Church".