Officials from Ghana and Uganda, two of the biggest recipients of UK aid in recent years, have suggested they would rather forgo funding than make concessions to homosexuals, reports the Financial Times.
British Prime Minister David Cameron said in an October speech that he would consider cutting development funding to countries that continue to persecute and ostracise gays and lesbians.
"We want to see countries that receive our aid adhering to proper human rights, and that includes how people treat gay and lesbian people. We are saying that this is one of the things that will dominate out aid policy," Cameron said.
The Prime Minister conceded that "deep prejudices" in some cultures meant the problem would persist for years.
His comments have sparked indignation and outrage across English-speaking Africa, with Ugandan presidential adviser John Nageda accusing Cameron of a "bullying" and "ex-colonial" mentality.
"Uganda is, if you remember, a sovereign state and we are tired of being given these lectures by people," he told the BBC's Newshour programme
Ghana's President John Atta Mills has also rejected Cameron's threat, saying he would "never initiate or support any attempt to legalise homosexuality in Ghana."
Homosexuality is illegal in many African countries, and most Africans argue that such practices violate their religious and cultural beliefs.
Malawi has already had some of its budget support suspended over concerns about its attitude to gay rights.
Critics say that many of the anti-gay laws in the Commonwealth are a legacy of British colonial rule, while human rights activists have expressed concerns that making aid conditional in this way has inflamed anti-gay sentiment in affected countries.
There are also questions as to why Britain has chosen to elevate this issue above others, such as women's rights, torture, corruption etc.