Chuck Hagel, Obama's nominee for Pentagon chief, was driven to make controversial 'homophobic' comments because of a drag queen group called the Sisters of Perpetual Indulgence, it was revealed today.

Hagel has come under fire since his nomination for calling James Hormel, named as Ambassador to Luxembourg, being 'openly, aggressively gay' in 1998.

It now emerges that one of Hagels' main objections to Hormel appeared to be his evident enjoyment of a performance by the San Francisco drag queen group the Sisters of Perpetual Indulgence, known for their performances while dressed as nuns.

'Anti-Catholic': Hagel was said to have taken offence at a video of Hormal watching the drag group who dress as nuns

The main focus of opposition to Hagel comes from Republicans, and some pro-Israel Democrats, who are concerned about his use of the term 'Jewish lobby' and criticism of Israel.

But a number of Democrats are also concerned about past remarks by Hagel about Hormel and about climate change.

In an interview with the Omaha World-Herald, 1998, Hagel said that Hormel’s gay conduct in public went 'beyond common sense' and that he had seen a video of Hormel at a Sisters of Perpetual Indulgence event.

Hagel, who is Episcopalian, told the that being gay shouldn’t in itself disqualify a candidate from being an ambassador but that Hormel’s conduct would hamper his ability to be effective.

Hormel, the then Nebraska senator said, had 'very aggressively told the world of his gayness and the funding and all the things he’s been involved in', adding: 'I think you do go beyond common sense there, and reason and a certain amount of decorum.'

Apology: Hagel, pictured here being nominated by Obama as Defense Secretary this week, has since said sorry for his 'insensitive' comments

He said: 'If you send an ambassador abroad with a cloud of controversy hanging over him then I think it’s unfair to our country, it’s unfair to the host country and it’s unfair to the ambassador because the effectiveness of that individual is going to be seriously curtailed. That’s just a fact of life. And I believe Hormel’s situation is one of those.'

In the interview, Hagel referred to a documentary, filmed with money that Hormel donated, that was meant to show teachers how to teach children about homosexuality.

Hagel said he had seen another video clip that showed Hormel at a San Francisco event which was 'anti-Catholic' in San Francisco, featuring a group of male drag queens called Sisters of Perpetual Indulgence.

'It is very clear on this tape that he's laughing and enjoying the antics of an anti - Catholic gay group in this gay parade. I think it's wise for the president [Bill Clinton] not to go forward with this nomination.'

Hormel, whose nomination as ambassador was confirmed, accepted Hagel's public apology last month for the 'insensitive comments' but said that it had not been made to him personally and that the timing made its sincerity questionable.

'I have not received an apology,' he told The Washington Post. 'I thought this so-called apology, which I haven’t received, but which was made public, had the air of being a defensive move on his part.'