One of the most senior Conservative politicians, the shadow home secretary Chris Grayling has come under fire for backing the right of bed and breakfast owners to bar gay couples.

He was speaking at an event entitled ‘a Conservative Home Office’ held at the Centre for Policy Studies last week, a recording of the event was obtained by the Observer and published today.

“I think we need to allow people to have their own consciences,” he said. “I personally always took the view that, if you look at the case of should a Christian hotel owner have the right to exclude a gay couple from a hotel, I took the view that if it’s a question of somebody who’s doing a B&B in their own home, that individual should have the right to decide who does and who doesn’t come into their own home.”

Mr Grayling was making reference to Susannne and Mike Wilkinson, who own the Swiss B&B in Berskhire and hit hit the national news last month for turning away a gay couple who had booked a room.

Mr Grayling did however draw a distinction between hotels and bed and breakfasts being run in someone’s home. “If they are running a hotel on the high street, I really don’t think that it is right in this day and age that a gay couple should walk into a hotel and be turned away because they are a gay couple, and I think that is where the dividing line comes.”

The comments put him at odds with the Equality Act (Sexual Orientation) Regulations 2007, which he voted for. The regulations prevent gay from being refused goods or services due to their sexuality.

Ben Summerskill of LGB rights group Stonewall told the BBC: “I don’t think anyone, including the Tories, wants to go back to the days where there is a sign outside saying: ‘No gays, no blacks, no Irish’ ”

In a statement, Mr Grayling said: “Any suggestion that I am against gay rights is wholly wrong – it is a matter of record that I voted for civil partnerships.

“I also voted in favour of the legislation that prohibited bed and breakfast owners from discriminating against gay people.

“However, this is a difficult area and on Wednesday I made comments which reflected my view that we must be sensitive to the genuinely held principles of faith groups in this country.

“But the law is now clear on this issue, I am happy with it and would not wish to see it changed.”

Chris Bryant, the openly gay Europe minister told The Observer: “Anybody who thinks that the Tory party has changed should think what it would be like to have Chris Grayling as home secretary. It is impossible to draw a distinction between bed and breakfasts and hotels. It is very clear that very senior Tories have not realised that the world has moved on.”

Chris Huhne, the Liberal Democrat Home Affairs spokesman told the BBC: “Chris Grayling’s plan would allow discrimination to thrive”.