The Home Office is looking at the possibility of removing the offence of causing “insult’ from the Public Order Act.

Currently, section 5 of the Public Order Act 1986 says that “a person is guilty of an offence if he … uses threatening, abusive or insulting words or behaviour … within the hearing or sight of a person likely to be caused harassment, alarm or distress thereby.”

The law has been used to arrest Christian street preachers who deliver anti-gay sermons, such as Cumbrian preacher Dale McAlpine, who later won £7,000 compensation for wrongful arrest.

It has also been used against Muslim extremists who have called British soldiers “terrorists” and “butchers of Basra”.

However, some arrests under the law have not led to prosecution.

In 2008, a student was charged under the Act for holding a sign outside Scientology’s London headquarters calling the movement a “cult”. And in 2006, another student was arrested for calling a police horse “gay”. In both cases, the charges were dropped.

An amendment is contained in the Protection of Freedoms Bill and Home Office consultation was published yesterday.

Civil rights groups – and gay rights campaigner Peter Tatchell – have called for the law to be changed because it “criminalises free speech”.

Gay rights charity Stonewall has opposed any change to the law.

Speaking in July, Ruth Hunt, Stonewall’s director of public affairs, said: “We believe that the law is currently settled in the right place balancing freedom of expression with people’s right to live free from abuse which can be hugely intimidating. We will continue to express this view firmly to ministers.”