Three British men were refused service and called ‘queers’ by staff at a pub yesterday (26 November).
At a Wetherspoons in Manchester, staff told the three they could not have any food or drinks.
The three apparently all work in Manchester's world famous gay Village.
The men reported it to the police but the member of staff in question was not charged.
A Greater Manchester Police spokesman confirmed the incident.
They said: 'Shortly before 7.50am on Tuesday 26 November 2013, police received a report that three men had been refused service inside a licensed premises in the Manchester Piccadilly area and that they believed this to be a homophobic incident.
'Officers attended and a woman was arrested on suspicion of a public order offence.
'She was taken into police custody for questioning and officers investigated the reasons surrounding the refusal of service.
'The woman was later released without charge.'
A Wetherspoon spokesman said: 'A group of 3 customers were refused service at approximately 7.30am on the 26th November at our premises on Piccadilly, Manchester on the grounds that the member of staff serving them believed one member of the group to be intoxicated.
'After conducting an investigation into the matter, we are satisfied that the decision to refuse service was not based on the sexual orientation of the individuals concerned.
'In the conversation that followed the initial refusal of service both the group and member of staff made reference to the sexuality of the customers but this was not intended on the member of staff's behalf to be in any way offensive and we apologise if it was considered so.
'We have fully cooperated with the Police investigation into the matter and note they have decided no further action will be taken against the member of staff concerned.
'As a company JD Wetherspoon would not countenance the refusal of service to any customer based on their sexuality.'
A Lesbian and Gay Foundation spokesman said they would urge everyone to let Wetherspoons know this kind of behavior is ‘homophobic, and should not be tolerated.'
UPDATE: This article was updated on 28 November to reflect new information from Manchester police and JD Wetherspoon.