The Office of the Scottish Charity Regulator has ruled that St Margaret’s Children and Family Care Society in Glasgow is directly discriminating against LGBT people by excluding them from becoming adopters.

The ruling follows a complaint from the National Secular Society.

The Scottish Charity Regulator’s head of registration, Martin Tyson, was quoted as saying on the BBC: ‘We acknowledge the valuable service provided by this charity, but the fact is that all charities must comply with the law, including the Equality Act 2010.

‘Where we find this is not the case, we have a duty to act.

‘We hope that the charity will respond positively and take the necessary action so that it remains in the Scottish Charity Register’.

The regulator has issued a direction to St Margaret’s, instructing it to amend its procedures and assessment criteria to meet the requirements of the Equality Act.

It has until 22 April 2013 to do so or risk losing its charitable status.

A spokesman for the Catholic Church said it had been informed of the regulator’s findings.

He added: ‘We will fully examine the contents of their determination and take appropriate legal counsel before responding’.

Scottish Education Secretary Mike Russell said he was ‘disappointed’ with the regulator’s decision.

‘We do not believe that this outcome is in the best interests of the children St Margaret’s helps, who are in need of a safe and loving family home.

‘We believe St Margaret’s should be able to continue its valuable work and are actively and urgently seeking a solution.

‘I will personally meet with representatives of St Margaret’s next week to discuss the best way forward’.

Alistair McBay, spokesperson in Scotland for the National Secular Society, said: ‘After the ruling in England by the Charity Commission, backed by the courts, that Catholic adoption agencies there were in breach of the Equality Act by denying their services to gay couples, it is logical that the Scottish charity regulator has reached the same decision about St Margaret’s.

‘This kind of crude discrimination is no longer acceptable in our society – and that goes double where the discrimination is, in effect, being largely financed by the public purse.

‘If St Margaret’s wishes to continue to provide services, it must remove these provisions from its constitution – this will be in the children’s best interests.

‘In England, some of the Catholic agencies complied and are now providing their services to everyone without prejudice.

‘We certainly hope it will not take the same route as Catholic Care (Diocese of Leeds) which pursued a long, expensive and, in the end, fruitless appeal with the Charity Commission.

‘The charity’s funds can be better spent in the interests of children than being wasted in legal fees to delay the inevitable’.