A new equality law will make it illegal to shout homophobic insults or discriminate against gay couples.

The government aims to bring in a single equality act after the election that will ban hotel owners from refusing rooms to gays and will outlaw discrimination on religious grounds as well.

Jacqui Smith, the equality minister, launched the bill on Thursday and said it would protect Muslims from abuse, which was particularly necessary in today's climate of Islamophobia.

The bill will establish a powerful equality and human rights body that will have the power to "combat prejudice and work to reduce crime affecting particular communities," Smith said.