A Christian bakery owner who refused to make a cake with a slogan supporting gay marriage has said he should be allowed to run his business according to his religious beliefs.

Ashers Baking Company could face legal action from an equality watchdog after declining an order for the cake with the Sesame Street puppets Bert and Ernie on top.

The gay rights activist customer who ordered the cake also wanted the logo of a campaign group called Queerspace included.

The bakery is based in Northern Ireland, the only part of the UK where same-sex marriage is not legal.

The company was named after a verse from the Bible, which refers to "Bread from Asher".

Ashers was founded in Newtownabbey, north of Belfast, in 1992 and is run by the McArthur family.

The Christian directors oversee six shops in Northern Ireland and employ 62 people.

General manager Daniel McArthur said: "I would like the outcome of this to be that any Christians running a business could be allowed to follow their Christian beliefs and principles in the day-to-day running of the business and that they are allowed to make decisions based on that."

Gay marriage is a highly divisive issue in Northern Ireland and while the bakery's decision has been backed by Christian advocacy groups it faced criticism from gay rights organisations who argue that discrimination in delivering services is illegal.

The devolved assembly at Stormont has rejected several attempts to change the law on gay marriage and local politicians have intervened on both sides of the bakery debate.

Mr McArthur said the customer placed the order at the Belfast branch a number of weeks ago and it was considered by company head office, which decided it was at odds with the organisation's beliefs.

He said: "It certainly was in contradiction with what the Bible teaches and on the following Monday we rang up the customer to let him know that we could not take his order."

The firm gave a full refund but six weeks later received a letter from the Equality Commission, which helps those who complain of discrimination.

Mr McArthur said the commission claimed his firm had discriminated against the customer on the grounds of his sexual orientation.

He added: "It asked us to propose how we would recompense the customer for this discrimination. It also said it would pursue legal proceedings if we didn't respond within a seven-day time period."

His firm asked the Christian Institute for advice and it is providing legal assistance.

Mr McArthur said: "I feel if we don't take our stand with this case then how can we stand up against it further down the line, certainly from an equality point of view?

"Although we have found this experience unsettling and disruptive to our day-to-day business we are certainly convinced that we have made the right decision.

"We do continue to take the stand and stance that we do take."

The bakery has released a video commenting on the case.

Alliance Party member Andrew Muir said the cake was ordered for an event he hosted when mayor of North Down Borough Council.

He said another bakery stepped in and produced the cake to help mark International Day Against Homophobia and Transphobia in Bangor town hall, Co Down.

Mr Muir said: "I fully support the action taken against this bakery. Businesses should not be able to pick and choose who they serve.

"There would not be any debate if the cake had depicted an anti-racism or anti-ageism slogan, nor should it require intervention from the Equality Commission for this cake for Anti-Homophobia Day.

"It is ridiculous for this bakery to suggest that they would have to endorse the campaign.

"For Northern Ireland to prosper and overcome our divisions we need a new society where businesses are willing to cater for all, regardless of religious views, political opinion, disability, race, age, sexual orientation, marital status, gender and other backgrounds."

Gavin Boyd, a gay rights campaigner with the Rainbow Project in Northern Ireland, supported the customer's discrimination case but said he hoped the matter would not proceed to costly court hearings and the supreme court had already made its view clear.

"I would encourage companies to make business decisions that would be in the best interests of the profit margins of the companies."

The commission said it provided assistance to those who complain of suffering unlawful discrimination.

"In this case the commission has granted assistance to the complainant and has written to the company concerned on his behalf.

"The commission will consider any response before taking further action."

The Christian Institute's director, Colin Hart, said the case was a sign of things to come.

He claimed: "The government repeatedly failed to listen to members of the public, lawyers, constitutional experts even its own MPs when they called for safeguards to protect those who back traditional marriage, whether at work or in business.

"All the McArthurs want is to run their bakery according to their Christian beliefs. There won't be many situations where they need to turn down an order but this is obviously one of them.

"No-one should be forced to use their creative skills to promote a cause which goes against their consciences.

"Imbalanced equality laws are making it increasingly hard for people, especially Christians."

He said millions of ordinary people who do not agree with gay marriage face intimidation and the real threat of legal action from the forces of political correctness if they, out of conscience, decline to provide goods or services to campaign groups they do not agree with or support.

"It establishes a dangerous precedent about the power of the state over an individual or business to force them to go against their deeply-held beliefs."