Kampala (AFP) - A row over a law banning homosexuality in Uganda has been reignited after it emerged that the government paid a US public relations firm to offset negative publicity, a report said Monday.

Uganda's Observer newspaper said the government had spent 614 million shillings ($206,000, 174,000 euros) "to prop up Uganda's image" after it was "tarnished by the Anti-Homosexuality Act".

It said that many MPs in the east African nation's parliament, where support is strong for tough anti-gay legislation, were now refusing to approve the government's payment to Scribe Strategies and Advisors, a Washington-based lobbying firm.

"It's quite unbelievable that the Ministry of Foreign Affairs could use this money to clear Uganda's image, yet us as Ugandans we are against this issue of homosexuality," Florence Nebanda, one of several reportedly furious MPs, was quoted as saying.

Fox Odoi, an MP who opposed the legislation, confirmed that the foreign ministry had informed parliament that the cash was paid to the firm to lobby a bipartisan congressional caucus.

He said the firm was paid "to clear the image of Uganda".

"The expenditure shows the financial loss the country suffered as a result of the reckless behaviour of parliament," he told AFP.

"That was not the only loss. Several development partners withheld funding to several government agencies. A number of companies also refused to do business with and in Uganda," he added.

Aston Kajara, a state minister, was also quoted as saying that the fall-out from the controversy had resulted in President Museveni having trouble finding a hotel room in Texas in September last year, when he visited the US state to drum up investment.

"There were campaigns against the government of Uganda to the extent that even the hotel they had booked for him had to change. We engaged consultants to intervene and stem the hostility against the president on behalf of Uganda," the Observer quoted him as saying.

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The anti-gay bill, under which gays could have been jailed for life, was signed into law by Ugandan President Yoweri Museveni in February 2014, but was struck down six months later by the constitutional court on a technicality.

The law drew widespread international condemnation, with US Secretary of State John Kerry likening it to anti-Semitic legislation in Nazi Germany.

Since then MPs have proposed another law criminalising the "promotion" of homosexuality, although activists say it would be equally repressive.

Prominent Ugandan gay rights activist Frank Mugisha said he hoped the new row over spending would make parliament think twice before pushing through any new legislation.

"It would have been cheaper and the government wouldn't have needed to spend that money if our parliament was not passing laws that are controversial and affecting our economy and international relations," he said.