The rally was due to take place on Friday (25 May) and is a campaign - named "For Diversity - Against Discrimination" - organised in cooperation with the European Union, aimed at promoting tolerance towards minority groups, including gays and lesbians.

One of the highlights of the event was to have been the arrival of a so-called "anti-discrimination" bus, which is touring 19 EU member states and designed to inform citizens of their rights under EU and national anti-discrimination legislation.

The move makes Vilnius the first capital in Europe to reject the travelling campaign, which is now into its fourth season.

The EU on Monday said it "regrets the decision to cancel the planned event" in Vilnius, AFP reports.

"The decision by the city authorities shows how much still needs to be done to change behaviour and attitudes towards discriminated groups and to promote awareness of diversity," the European Commission said in a statement.

The ban comes after Trolleybus drivers in Vilnius and Kaunas earlier this month refused to drive vehicles carrying advertisements calling for sexual tolerance.

Sweden's ambassador to Lithuania Malin Karre spoke to the Lithuanian parliament last week calling for the rights of gay and lesbian people to be upheld.

The comments angered anti-gay activists, who protested outside the Swedish embassy in Vilnius with anti-gay activist Vaidas Vysniauskas saying that the speech of the ambassador "hurt [the] religious feelings of faithful Lithuanian citizens."

"We are worried that the representative of a foreign country does not understand that maybe the virtues possibly acceptable for Swedish are not acceptable for Lithuanians," Mr Vysniauskas said, according to the Baltic Times.

Thousands of people marched last weekend in the Polish capital, Warsaw's annual gay-rights parade, days after the country's education minister called for a ban on the "propagation of homosexuality" in Poland's schools.

Gay rights activists from across Europe together with MEPs and Swedish Europe minister Cecilia Malmstrom attended the rally in Poland.