Legislation to outlaw homophobic discrimination on the Isle of Man will be accelerated after a gay couple were told they could not rent a house together.

The island’s Chief Minister Alan Bell moved to limit any damage to the jurisdiction’s international reputation following fury at a church leader’s refusal to allow two women to move into a flat together on the grounds that the couple did not constitute a “family”.

Mr Bell described the beliefs of the Independent Methodist Church - of which the landlord of the property in Ramsey was a member - as “bigoted” and warned that the row threatened to reverse two decades in which the island has battled to leave behind its pariah status among the lesbian, gay, bi-sexual and transgender communities.

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Homosexuality was illegal under Manx law until 1992. The row erupted last week when Kira Izzard and Laura Cull were refused permission to rent a flat next door to Ms Cull’s sister and her three-year-old son.

She said they felt “numb” on learning that they had been legally declined the tenancy. “I was so shocked to hear this and felt sick as I didn’t know where to go or what to do as I didn’t have a legal leg to stand on,” she said.

The couple, who have been together for four years, were told that even though the Isle of Man had enacted the Civil Partnership Act it had yet to ratify an Equality Bill which would make it illegal to discriminate against people on the basis of their sexual orientation.

The local minister who refused the tenancy application defended his action.

Keith Price said: “We are not homophobic but we do have a stance on the sexuality." He added: “We believe that God has a plan for our lives within the context of marriage, the scripture is quite clear in its teaching on this.”

Mr Bell described the decision as “ugly, outdated prejudice” but admitted that nothing could be done about it.

“I do believe that our society today is generally much more tolerant than it used to be. But this incident shows that there are still isolated pockets of bigotry that can only be tackled through legislation. An Equality Bill, based on the UK Equality Act of 2010, is already in the drafting process and will deal with discrimination of this kind. I have asked that preparation of this legislation be accelerated,” he said.

Ms Izzard welcomed the official response to their plight after they were inundated with support on social network sites after launching an on-line petition demanding a change in the law.

“We’re over the moon that we’ve been heard by so many people and that the government are taking this matter seriously and accelerating the process,” she said.

Rob McDowall, the Chair of the LGBT Network which helped co-ordinate the campaign described it as a historic moment for LGBT rights in the Isle of Man.

“Discrimination in all its forms is intolerable and I am delighted the Chief Minister agrees and has pledged his commitment to speeding up the legislative process to realise equality for the Isle of Man’s LGBTQ community,” he said.

As a Crown dependency the Isle of Man is able to pass its own primary legislation although it is contracted within the European Convention on Human Rights. However, a number of male homosexual acts remain illegal under Manx law including consensual sex between men aboard a merchant ship.