The Press Complaints Commission (PCC) is to launch an inquiry into the Observer’s decision to publish a transphobic article by Julie Burchill.

The commission acted after receiving 800 complaints from members of the public in relation to the article, which was eventually removed from guardian.co.uk, the website of the Observer’s sister paper.

In a piece headed “Transsexuals should cut it out”, Burchill described trans people as “shims”, “shemales” and “bed-wetters in bad wigs”.

Burchill wrote the article in defence of her friend and fellow writer Suzanne Moore – who had also caused offence in the trans community with some of her remarks in an article that was published first in the New Statesman and then in the Guardian.

On Monday, Scottish Transgender Alliance (STA) warned of “rising transphobia in the British media” in response to a whole host of controversial comments made in the past week by Guardian/Observer columnists’ Suzanne Moore, Julie Bindel and Julie Burchill.

The editor of the Observer, John Mulholland, withdrew Burchill’s column and apologised for the upset that it caused on Monday.

The online version of Burchill’s column attracted more than 2,200 comments, most of them negative, before it was taken down.

Last weekend, Liberal Democrat International Development Minister Lynne Featherstone called for Mulholland and Burchill to be sacked over the article.

The Observer’s readers’ editor, Stephen Pritchard, has announced his own internal inquiry into how the column came to be published.

The PCC’s editors’ code of practice states in a clause on discrimination that the press “must avoid prejudicial or pejorative reference to an individual’s race, colour, religion, gender, sexual orientation or to any physical or mental illness or disability”.