She may not be a fan of gay marriage but she won't be a party too on any forms of gay slur, Prime Minister Julia Gillard has indicated on Thursday, following her decision to withdraw from a speaking duty with the Australian Christian Lobby (ACL) set for October.

In a statement, Ms Gillard labelled the remarks aired by ACL Managing Director Jim Wallace as "offensive, heartless and wrong."

It was completely inappropriate "to compare the health effects of smoking cigarettes with the many struggles gay and lesbian Australians endure in contemporary society," the prime minister said in explaining the reason why she must skip the ACL gathering.

She lamented that sense of respect and responsibility were thrown overboard, at least by some quarters, in the ongoing debate of same-sex marriage.

"In light of this, I believe my attendance at the (ACL) conference would be inappropriate," Ms Gillard was quoted by News Ltd as saying in her statement issued Thursday.

The mouthful unleashed Mr Wallace was 'unacceptable', added Ms Gillard, who has earlier declared that she would not support legislations to be introduced at the Parliament that intend to legalise gay marriage in Australia.

The prime minister, however, vowed not to get in the way of Labor MPs who would vote in favour of gay union proposals at the House of Representatives.

In a reaction, Mr Wallace told ABC Radio that it was "disappointing that the prime minister has acted so hastily on the basis of misreporting and false information from gay activists."

The ACL chief claimed his remarks were taken out of context.

"What I was saying is that on one hand we are vocal on our discouragement of people to smoke and on the other we are suppressing public dialogue about the health risks associated with homosexuality," Mr Wallace explained in a separate statement he issued Thursday.

He added that he was merely articulating his confusion on why so many people were opposed to the habit of smoking and its ill-effects while at the same time reluctant to voice out disapproval of gay lifestyle.

"If we warn against smoking because it carries health dangers, we should also be warning young people in particular about activity which clearly carries health risks," Mr Wallace clarified.

What just happened, he added, translated into "a victory for the relentless campaign of demonisation against anyone who would challenge the gay activists' agenda in the public square."

Greens leader Christine Milne, for her part, lauded Ms Gillard for ditching her ACL speaking engagement, stressing that the prime minister "should not be anywhere near the Australian Christian Lobby."

"They're a private company, they have no affiliation with churches and their whole focus is to attack the gay community," Senator Milne told ABC on Thursday.