Ken Livingstone’s suggestion that gay bankers would be mutilated in the emirate of Dubai has been described as a “desperate attempt to grab headlines”.

The 2012 London mayoral hopeful had almost been clear of the controversy he prompted earlier this week when he said the Conservative party had been “riddled” with concealed homosexuality.

Asked by the Metro whether he feared a banking exodus, Mr Livingstone said: “Our only real competitor is New York.”

When Dubai was suggested, he told the paper: “Would you want to get your penis chopped off? A gay banker would get his penis cut off in Dubai.”

Chris Doyle, Director of the Council for Arab British Understanding, said Mr Livingstone’s comment was “ridiculous”.

He said: “This is a desperate attempt to grab headlines using damaging stereotypes about chopping off body parts.

“It is true that many areas of the Arab world are not as tolerant towards homosexuals as we are in Britain, but many gay men travel to the region and work there and conduct their private lives in private.”

Dubai does penalise gay sex with up to 10 years in prison under Article 177 of its criminal code, but there is no requirement that offenders’ penises are removed.

Writing for PinkNews.co.uk yesterday, the leader of Lambeth Council Steve Reed said Mr Livingstone had broken “new ground” for gay Londoners during his eight year tenure as mayor.