Malaysian health authorities are holding a contest on how to "prevent" homosexuality and transgenderism, drawing criticism from campaigners that it was fanning hatred and violence towards LGBT people.

Activists say intolerance of LGBT people has spiked in recent years in Malaysia, a multi-ethnic majority Muslim Southeast Asian country..

In the latest controversy, the health ministry's contest invites participants to submit video clips for categories including one called "gender identity disorder", according to details on the ministry's website.

"I was shocked. This is encouraging discrimination, hatred and even violence towards the minorities," said transgender activist Nisha Ayub from the Seed Foundation, a charity working with transgender people.

The ministry described gender identity disorder, also known as gender dysphoria, and cited examples of people who are gay, lesbian, transsexual and tomboys.

The contest guidelines added that the videos must include elements showing the "consequences" of being LGBT, as well as how to "prevent, control and seek help" for them.