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A complaint by television presenter Clare Balding that a description of her in a newspaper column as a "dyke on a bike" was discriminatory has been upheld, the Press Complaints Commission (PCC) said.
Writer AA Gill used the term in a Sunday Times review of a television show, presented by the openly gay Balding, called Britain by Bike.
The newspaper said Gill was well known for his acerbic sense of humour and argued the term "dyke" was no longer offensive, but seen as "empowering" by some gay groups.
But the commission ruled the use of the word was a "pejorative synonym relating to the complainant's sexuality", adding that Gill was using it "to refer to the complainant's sexuality in a demeaning and gratuitous way" and that it was a breach of the Editors' Code of Practice.
PCC director Stephen Abell said: "Freedom of expression is a key part of an open society and something which the commission has defended robustly in the past.
"While the commentator is clearly entitled to his opinion about both the programme and the complainant, there are restraints placed upon him by the terms of the Editors' Code.
"Clause 12 is very clear that newspapers must avoid prejudicial, pejorative or irrelevant reference to an individual's sexual orientation and the reference to Miss Balding plainly breached its terms."
In its defence, the newspaper said Gill was a "controversialist who pursues the English tradition of lampooning and ridiculing public figures". It pointed out he had been the subject of 62 PCC complaints in the last five years which had not been upheld.
Ben Summerskill, chief executive of gay rights group Stonewall, said: "We warmly welcome the PCC's ruling.
"Expecting civilised treatment isn't, as the editor of the Sunday Times claimed offensively in response to this complaint, 'having a special victim status'. We hope the Sunday Times will now accept the PCC's ruling and repair the damage done to its sales by publication of this article."
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