A Tory councillor facing a police investigation amid allegations he said homosexuals were all paedophiles is to carry on serving his ward for the party.

Gay activists have criticised the decision to allow Peter Willows to carry on representing Brighton and Hove City Council's Hangleton and Knoll ward while police investigate him for alleged public order offences.

The Conservative group on the city council decided only to suspend him from council committees, pending the outcome of the investigation.

Mr Willows is facing possible expulsion from the council and the Tories after admitting making the offensive remark at the mayor's reception at the Royal Pavilion on Thursday.

When confronted by The Argus he said he was drunk and added: "I don't have the same hatred for the gay community that I do for paedophiles. But I don't like them."

Yesterday the council's Conservative group suspended the long-serving Hangleton and Knoll councillor as a Tory member of the council's committees. The decision not to suspend him from his ward work provoked further outrage from the gay community.

Openly-gay Lib Dem councillor Paul Elgood said: "This flies in the face of David Cameron's new approach to politics in terms of reaching out to the gay community.

"While he remains in the Conservative party, the gay community will still not be able to trust the Tories on equality matters. These were premeditated comments designed to cause the maximum offence and his record shows that. This is a litmus test for the Tory party. He should be suspended from the Tory party until this investigation is complete."

David Harvey, editor of Brighton gay magazine 3Sixty, said: "If the Conservatives want a modern party, they would not want a person in it who has spoken such offensive things. He should resign and go."

Mr Willows yesterday told The Argus he had been "ordered not to give any comment" during the course of the investigation.

Earlier this month, Coun Willows insulted the gay community by complaining about the council's decision to fly the rainbow flag to celebrate International Day Against Homophobia (IDAHO) on May 17.

He apologised on Friday in a statement to The Argus, which said: "I recognise the comments have caused serious offence to the LGBT community and I wholeheartedly retract them and apologise for them.

"If comments I made at a recent civic event were taken to mean I equate paedophiles and gay people, that was not my intention nor my belief and again I apologise."

His comments outraged gay activists, who called for his resignation. Fellow Tories condemned his remarks and said he would be dealt with internally.

Speaking yesterday, Conservative party leader at the council, Brian Oxley, said: "In the light of a police investigation into these remarks and a possible reference to the independent Standards Board, it would be inappropriate for Councillor Willows to continue serving as a Conservative representative on council committees during this time.

"Conservative councillors value highly their ward work on behalf of local people and so Councillor Willows as a ward councillor will continue his work by discussing issues direct with officers and making representations on local issues in the usual way.

"Once these enquiries are concluded and their findings known, the Conservative group will consider the matter further."

A police spokeswoman said: "We are investigating him for any offences under the Public Order Act."

James Ledward, of G-Scene magazine, was at the mayor's reception and made a statement to the police on Saturday about the remarks.

Gay councillor Simon Williams, of the Green Party, has condemned Coun Willow's statements but advised the gay, lesbian, bisexual and transexual community not to give them undue attention.

He said: "Coun Willows is obviously entitled to disapprove of homosexuality but to object to a day that commemorates innocent people who have been murdered or suffered violence just because of their sexuality is totally inappropriate behaviour. I am pleased he has apologised and his Tory colleagues are distancing themselves from his remarks.

"However, the LGBT community should not pay too much attention to these fringe views and we need to be careful to avoid giving them undue attention with hysterical and adversarial counter-comments."

Conservative chief whip Ken Norman said: "We shouldn't allow Peter to say anything to anybody. It could compromise his position. It's not fair on him. If he is being investigated, then let the investigation take place."

Mr Willows also faced criticism from some of his own ward constituents.

Olivia Camp, 22, a nurse, of High Park Avenue, Hangleton, said: "I think it's awful. I didn't think people thought like that anymore."

Hayley Camp, 22, also of High Park Avenue, said: "Considering the time and age we're in, it's a bit shocking."

Mayur Patel, of Hangleton Way, said: "I'm not surprised people are upset and I wouldn't vote for him."