Sipping cocktails and swapping gossip on a roof terrace decorated with pink balloons and rainbow flags at a gay-oriented disco, leading figures of Britain’s once-hidebound Conservative Party mingle happily with those many in its ranks once derided.

Once described – by a senior Conservative official, no less – as the “nasty party,” the traditional home of Britain’s sometimes intolerant upper classes has undergone something of a transformation as it bids to win power for the first time since 1997.

But critics ask: is the makeover real or cosmetic?

Activists gathered in the northern England city of Manchester for an annual conference certainly showed off the newly inclusive spirit this week – dancing at the party’s first official gay reception, promoting aspiring lawmakers from Britain’s minority communities and cheering a newfound commitment to tackling poverty.

The loudest praise was reserved for the architect of the party’s niceness transfusion – David Cameron, the slick 43-year-old ex-public relations executive who’s overhauled his organization’s image and now seeks to oust Prime Minister Gordon Brown.

“You only have to look around the conference and see the different types of people who are here,” said Stuart Andrew, a gay Conservative candidate for a House of Commons seat. “They just wouldn’t have been here 15 years ago.”

But Tory suspicion runs deep in much of Britain – largely because of a reputation for heartlessness toward the poor.

The Conservatives swept to power under Margaret Thatcher in 1979 on a promise to modernize Britain’s economy, sweep away bureaucracy and tame powerful trade unions. They were reelected in 1983, 1987 and 1992, but without ever shaking off their image as the party of the white, affluent and sometimes intolerant.

Thatcher once shut down school programs for milk distribution, earning the nickname “Thatcher the milk snatcher.” In the 1980s, the party imposed laws banning the promotion of homosexuality in schools and shuttered coal mines – ruthlessly crushing strikes and putting generations of men in mining communities out of work.

By 1997, Tony Blair’s Labour Party was able to paint itself as the party of progress and an inclusive, modern Britain – and the Tories knew they had a problem.

Theresa May, the Conservative chairwoman, admitted as much in a speech to the party conference in Bournemouth, England on Oct. 7, 2002.

“There’s a lot we need to do in this party of ours,” she said. “Our base is too narrow and so, occasionally, are our sympathies. You know what some people call us – the nasty party.”

The notion stuck – even though many still view Thatcher as a savior of Britain’s economy reversing the country’s steep decline, breaking its dependence on unions and industrial behemoths – giving the country needed a dose of nasty medicine.

But Cameron’s skeptical stance toward the European Union has angered leaders in France and Germany, who warn relations with London could sour if he takes power.

Many hear echoes of Thatcher, and Ronald Reagan, in Cameron’s attacks on big government and welfare dependency.

Some conference delegates – and outsiders – were angered by convention invitations extended to Latvian and Polish lawmakers from parties accused by human rights activists of being homophobic or anti-Semitic.

It has led to questions about Cameron’s drive to end his party’s former hostility toward minority groups – a sentiment traced back to Thatcher’s era, when a contentious law, known as Section 28, barred teachers from promoting homosexuality in school lessons.

Other skeptics also question Cameron’s commitment to reducing poverty, pointing to his plans to freeze the pay of millions of government workers while helping the wealthy by cutting taxes on inherited mansions.

Nonetheless, Cameron, elected leader in 2005 with a mandate to drag his traditionalist followers into the modern era, has worked doggedly to shed the party’s image as a haven for the rich and expensively educated.

He rides a bicycle to work, rather than a chauffeured limousine. He’s quashed borderline racist rhetoric on immigration to focus on the environment and health care, and has demanded that his party promote more women and ethnic minorities to key positions.

In intimate Web videos, Cameron shows off his domestic life – washing dishes in the sink of a chaotic kitchen while patting the heads of playful young children.

His wife Samantha – a successful businesswoman who updated the tired image of stationery brand Smythson – is in tune with the party’s mood, eschewing haute couture for a relatively inexpensive dress from mainstream department store Marks & Spencer on the day of her husband’s keynote convention speech.

It’s a makeover designed to combat the party’s corrosive image as Tory “toffs,” and summed up in their slogan: “We’re all in this together.”

Yet opinion polls show many Britons aren’t persuaded that Cameron has transformed his party, or convinced his political rebranding is genuine. Pollsters say voters often recall how Cameron was photographed cycling to Parliament – as a car and driver followed close behind with his suit and briefcase. They also note the leader’s privileged education at Eton and Oxford.

Though Cameron is overwhelmingly favored to win Britain’s next national election, some detractors suggest his victory would be a rejection of Brown’s flagging government, rather than enthusiasm for the Conservatives.

Britain has thus far not embraced the Tory chief as it did Labour’s Tony Blair before his landslide election 1997 win – when millions were swept along by ‘Cool Britannia’ rhetoric, and promise of sweeping social reform.

“It’s not the groundswell of support that Blair received before 1997,” said Julia Clark, head of political research at Ipsos MORI. “Cameron has successfully detoxified his party and is seen as a credible leader – but that’s the problem, it’s all about Cameron. People aren’t so sure about the rest.”

Cameron won praise after he formally apologized for the anti-gay Section 28 in July at an event ahead of London’s Gay Pride rally.

He was also applauded for a 2006 speech in which – pledging tax incentives for marriage – he said a union was just as valid “whether you’re a man and a woman, a woman and a woman or a man and another man,” a key break with party tradition.

Ben Summerskill, chief executive of the gay rights group Stonewall, insists Cameron’s attempt to change attitudes has been a success.

“There has been a transformation,” he said. “I think it is inconceivable – not just 10 years ago, but five years ago – that we would have had the leader apologizing for the damage and offense caused by Section 28.”

Brown made the comments during a speech to British gay rights leaders during a reception at the Prime Minister’s official Residence 10 Downing Street the British Broadcasting Corporations reports.

“This attempt to undo good that has been done is unacceptable,” Brown said. “This shows why we have always got to be vigilant, always got to fight homophobic behavior and any form of discrimination.”

The Prime Minister praised UK gay leaders for pushing to have civil partnerships legalized in 2005, giving same-sex couples all of the rights of marriage except the name.

He praised the rights leaders for “changing opinion” about same-sex unions.

“You have shown how the legislative process, by your pressure, can respond,” he told the group.

Last May the California Supreme Court ruled in favor of same-sex marriage.  Some 18,000 gay and lesbian couples married before voters by a slim 52 percent approved Proposition 8.

Brown’s comments came only hours after the California high court heard arguments challenging the legality of the proposition.  It could be up to 90 days before a ruling is made in the case.

A senior military source told the Mirror newspaper that the incident would go on Harry’s record but would not count against him in his career.

The “equality and diversity” course is run by the Army, which for several years has been active in trying to reduce incidents of homophobia and racism in the armed forces.

The slurs were made in 2006 while the third in line to the throne was a cadet at Sandhurst, the royal military college, and captured on film. The video became public last month when the News of the World newspaper put it on its Web site.

At one point the prince asks a member of his squad about an exercise the officer cadets had just done. Then, off camera but clearly audible, asks “How do you feel? Gay? Queer on the side?”

Elsewhere on the tape he refers to another cadet as “our little Paki friend,” a derogatory word for Pakistani.

In another section he tells one of his comrades, who is wearing a camouflage headgear: “It’s Dan the Man … F*** me, you look like a raghead,” a slur for an Arab.

The comments drew outrage from human rights groups. The Equality and Human Rights Commission demanded a formal inquiry.

In announcing last month that it would investigate a Ministry of Defense spokesperson said: “Neither the Army nor the Armed Forces tolerate inappropriate behavior in any shape or form. This sort of language is not acceptable in a modern army.”

Yet, despite an apology for his taped remarks, Harry this week was accused to making another racist remark.

This week, black British comedian Stephen K. Amos said the prince had told him last year that he didn’t “sound like a black chap.”

Harry is the younger son of Prince Charles and the late Princess Diana.

In 2002, Charles took Harry to a drug rehab center to meet recovering addicts after Harry acknowledged smoking marijuana and drinking alcohol while underage. The tabloid press dubbed him “Harry Pothead.”

After graduating from elite boarding school Eton College the next year, Harry was frequently snapped by paparazzi leaving nightclubs in the early hours, and once scuffled in the street with a photographer.

In January 2005, Harry apologized after being pictured in a newspaper at a costume party dressed as a Nazi, complete with a swastika armband.

Gavin Alker, 19, is on trial for the killing last July of 18-year old Michael Causer.

As the prosecutor laid out the evidence Alker stood quietly in the prisoner’s box.

The court was told that the two men were part of a group that had met during a night out at a local pub. After heavy drinking the group went to the home of one of the men’s grandmother to “sleep it off”.

At some point Alker allegedly discovered from either Causer or one of the other men that Causer was gay.

Alker took a heavy hardbound American history book from a shelf, went into the room where Causer was sleeping and used it to batter Causer’s head. He then beat and kicked him repeatedly the court was told.

Prosecutor Richard Pratt told the jury there was only one reason for the attack: “Michael Causer was gay.”

“As he was subjected to the attack which would ultimately kill him, Gavin Alker was heard to abuse him using anti-gay language, indicating clearly that Michael Causer was being attacked, and was killed, because he was gay.”

Even after Causer fell into a coma the attack did not end.

“‘He’s a little queer,” said Alker, to one of the other men in the house who had gone to see what the noise was.  “He deserves it,” Alker added.

Pratt told the court that the evidence will show that Alker then tried to burn a section of Causer’s leg and prepared to rip his body piercings out with a knife.

At that point though, as Causer lay unconscious Alker and two other men – Michael Binsteed, 18,  James O’Connor, 19 – decided to dump the body on a street.

They hoisted the body over a fence and dragged it to the road. Alker then fled and the other two returned to the house and cleaned away evidence. Binsteed called an ambulance.

Paramedics found Causer on the roadway barely breathing and suffering massive brain injuries and was rushed to hospital.  He died eight days later when doctors declared him brain dead and a ventilator was removed.

Alker has pleaded not guilty to murder and has blamed Binsteed and O’Connor for the killing.

The killing galvanized Britain’s LGBT community and has drawn comparisons to the murder of  Matthew Shepard in Wyoming in October 1998.

Shepard was a gay University of Wyoming student. He met two men in a Laramie bar and left with him.  He was beaten and left to die lashed to a fence on windswept country road.

Found unconscious he was rushed to hospital but died a week later. Two men are currently serving life sentences for Shepard’s murder.

The slurs were made and captured on film in 2006 while Harry, the third in line to the throne, was a cadet at Sandhurst, the royal military college. The video became public on the weekend, when the News of the World newspaper put it on its Web site.

At one point the prince asks a member of his squad about an exercise the officer cadets had just done. Then, off camera but clearly audible, asks “How do you feel? Gay? Queer on the side?”

Elsewhere on the tape he refers to another cadet as “our little Paki friend,” a derogatory word for Pakistani.

In another section he tells one of his comrades, who is wearing camouflage headgear: “It’s Dan the Man … Fuck me, you look like a raghead,” a slur for an Arab.

The comments drew outrage from human rights groups. The Equality and Human Rights Commission demanded a formal inquiry.

“Neither the Army nor the Armed Forces tolerate inappropriate behavior in any shape or form. This sort of language is not acceptable in a modern army,” a spokesperson for the Ministry of Defense said.

If the military investigation finds the prince guilty of bringing discredit to the army, Harry could be demoted or merely given a slap on the wrist.

Sunday, the prince issued an apology through his office at St. James Palace, saying that he “fully understands how offensive this term can be, and is extremely sorry for any offence his words might cause.”

The statement went on to say: “However, on this occasion three years ago, Prince Harry used the term without any malice and as a nickname about a highly popular member of his platoon.”

It also said that  “Prince Harry used the term ‘raghead’ to mean Taliban or Iraqi insurgent.”

But British LGBT rights group called the apology insufficient.

“It’s conspicuous that Prince Harry has expressed regret for his racist remarks, but not yet for his homophobic ones,” said Stonewall head Ben Summerskill in a statement to Britain’s Pink News.

“We trust that the Prince will act very swiftly to offer an appropriate apology, in particular to those lesbian and gay personnel currently on active duty in Iraq and Afghanistan.”

The Advertising Standards Authority said the ad violated its industry standards by vilifying gays.

The ad had been placed in the daily New Letter, a Belfast publication, and bore the headline: “The Word Of God Against Sodomy.”

The ad was sponsored by the Sandown Free Presbyterian Church and appeared days before Belfast’s Gay Pride parade.

Below the headline, the ad stated: “The act of sodomy is a grave offence to every Bible believer who, in accepting the pure message of God’s precious word, express the mind of God by declaring it to be an abomination.”

In a response to an investigation by the ASA the church said that it could not be held responsible “if readers were offended by the message of the Bible.”

The News Letter told the ASA that it was aware the ad was likely to be controversial but agreed to publish it on the basis of free speech.

In its ruling, the ASA said that the ad went too far and many readers were likely to find it unacceptable. The ASA ruled that the ad should not appear again in its current form.

Sandown Free Presbyterian Church pastor Rev David McIlveen, however, is not repenting.

McIlveen said the ruling was “setting a very dangerous precedent.”

“By determining that portions of the Bible have breached advertising standards on decency the ASA is taking the view that the printing and publishing of certain biblical texts is indecent,” he said in a reply to the ASA.

“This is an offence to every Bible believer.”

McIlveen also rejected an ASA recommendation that it seek regulatory approval before publishing future ads.

Constable Graham Cogman, 49, accused the Norfolk police of promoting gay rights over religious beliefs. The emails contained biblical quotes and in one mailing said ”love the sinner hate the deed” after calling homosexuality “sinful.”

Another email espoused the so-called “ex-gay” movement and said there was scientific evidence homosexuality was a matter of choice that could be cured. As evidence, he cited a U.S. group that has been discredited by both the American Psychiatric Association and the American Psychological Association.

Cogman used police department computers to send the emails, and began his campaign two years ago after the force’s gay liaison unit circulated an email encouraging staff to wear a pink ribbon on uniforms during Gay History Month.

Cogman was ordered to stop sending “offensive mailings” using police computers. But the following year, he stepped up his campaign after the liaison unit asked officers to wear a rainbow ribbon during gay pride.

Cogman in one email claimed gays were usurping the rainbow which “symbolized God’s faithfulness.”

He also was accused of victimizing a gay liaison officer.

An internal police tribunal this week found Cogman guilty of failing to comply with a lawful order over the use of police computers and with failing to treat a colleague with respect and tolerance.

“The outcome follows a thorough investigation with evidence presented to a misconduct panel of three, two of whom were independent of the constabulary,” said Deputy Chief Constable Ian Learmonth.

“This officer’s behavior fell well below what we expect of our people. We require an absolute commitment from all our staff to treat colleagues with politeness, tolerance and respect, regardless of their beliefs, race, age, gender or sexual orientation.”

Gogman has not said if he will appeal.

In a letter to the editor of Pulse – a journal for general practitioners – Dr Muhammad Siddiq, the head of the Islamic Medical Association, said that gay patients deserve neither help nor pity but they do need “the stick of the law to put them on the right path.”

“There is punishment and a fine if you throw rubbish or filth in the streets. The gays are worse than the ordinary careless citizen,” the letter said. It also claimed that gays “are causing the spread of disease with their irresponsible behavior. They are the root of many sexually transmitted diseases.”

In addition, the letter said that a depressed transsexual awaiting gender reassignment was “twisted.”

After a complaint was filed with the medical board, Siddiq denied writing the letter, claiming that it was written by his son as a joke and he signed it not knowing the son would send it to the publication.

But the Pulse editor testified before a board hearing that the publication checked with Siddiq prior to publishing the letter and he did not deny writing it. Colleagues also say that he told them he had written the letter.

The chair of the board hearing the complaint, Dr. Andrew Popat, called the Siddiq’s actions inappropriate and not in the best interests of his patients.

Popat said that the letter was “liable to undermine public confidence in the medical profession and liable to bring the profession into disrepute”, adding that “the panel continues to have concerns regarding Dr Siddiq’s insight into his actions.”

Siddiq refused to attend the hearing, claiming the board was biased against him.

It came during a speech at a trade union conference by another member of the House – Harriet Harman, the deputy government leader in the Commons.

Harman was taking questions and answers following a speech to union organizers in Brighton. Asked about pensions for same-sex couples under the UK’s civil partnership law, Harman revealed that Eagle and longtime partner Maria Exall, an engineer with British Telephone, will exchange vows later this month.

Journalists in the hall noted a surprised look on the faces of both Exall and Eagle. The impending ceremony was to have been a secret, known only to a select number of friends.

“I wasn’t expecting her to say this and I suspect Harriet wasn’t expecting to say it either. But it is not a state secret,” Eagle told reporters.

The couple later issued a statement saying: “Maria and I are looking forward to making our relationship official and celebrating this with our friends and family later this month.”

Eagle and Exall met 18 years ago at a Labor Party event in London.

Eagle publicly came out in 1997 in an interview with a national newspaper and has been an MP since 1992.

The civil partnership law was passed by the Labor government three years ago.

The agency has contracted with LGBT rights group Stonewall to help it recruit members of the community and to encouraged gays already in the service to come out.

The move, said Stonewall spokesperson Ben Summerskill, “is in recognition that the establishment is changing and slowly becoming more reflective of wider society.”

The British military long ago abandoned its ban on gays serving openly and also recently asked Stonewall for help in recruitment. M16, the country’s foreign intelligence service, ended its ban on gay spies a year ago.

Homosexuality was decriminalized in the UK in 1967 but gays and lesbians were barred from working in sensitive jobs in the diplomatic or security services until the early 1990s, over concerns that gay spies could be vulnerable to blackmail.

Activist Peter Tatchell said the change was long overdue.

“Until a decade ago, gay people were seen as a security threat, and as recently as two decades ago, they were being witch hunted and sacked from the security services,” he told The Associated Press.

The change is a marked turn from the height of the Cold War, when Britain’s spy agencies conducted a purge of suspected gays following the Burgess affair.

Guy Burgess was arguably the most dangerous gay man who ever lived. As a spy for the Soviet Union, the Englishman helped organize a ring of gay men who came from the highest echelons of British society.

According to documents that have been declassified from both British Intelligence and the CIA, Burgess and his fellow spies helped prolong the Cold War for years, and possibly led to the deaths of nearly a dozen western agents.

The ring of gay included Anthony Blunt, a tutor of French; Donald Maclean, a career civil servant who served in the Foreign Office, Paris, Washington and Cairo; Harold Adrian Russell “Kim” Philby, a journalist who as an agent in MI6 was a double agent also working for the Russians; and John Cairncross, the private secretary to Lord Hankey who was Secretary for Security.

On May 26, 1951, Burgess and MacLean defected to the Soviet Union, brining their espionage to light. It took the next 20 years for the others to be identified and the damage assessed.