British Prime Minister David Cameron has threatened to withhold British aid from governments including Sri Lanka, where centuries-old legislation banning homosexuality still exists, if these countries do not reform such legislation, the BBC reported.
Mr. Cameron said he raised the issue with some of the states involved at the Commonwealth Heads of Government Meeting in Perth.
Some 41 nations within the 54-member Commonwealth have laws banning homosexuality. Many of these laws are a legacy of the British Empire.
Human rights reform in the Commonwealth was one issue that leaders failed to reach agreement on at the summit.
Mr. Cameron said those receiving British aid should adhere to proper human rights.
Ending the ban on homosexuality was one of the recommendations of an internal report into the future relevance of the Commonwealth.
Mr. Cameron's threat applies only to one type of bilateral aid known as general budget support, and would not reduce the overall amount of aid to any one country.
Malawi has already had some of its budget support suspended over concerns about its attitude to gay rights. Concerns have also been raised with the governments of Uganda and Ghana.
Mr. Cameron told BBC One's Andrew Marr Show that "British aid should have more strings attached".
But he conceded that countries could not change immediately, and cautioned there would be a "journey".
"This is an issue where we are pushing for movement, we are prepared to put some money behind what we believe. But I'm afraid that you can't expect countries to change overnight. Britain is one of the premier aid givers in the world. We want to see countries that receive our aid adhering to proper human rights. We are saying that is one of the things that determine our aid policy, and there have been particularly bad examples where we have taken action," Mr. Cameron said.
He said he had spoken with a number of African countries and that more pressure had been applied by Foreign Secretary William Hague, who deputised for him during parts of the summit.
The discussion in the Ugandan parliament of an anti-homosexuality bill in 2009 sparked particular controversy, and earlier this year Ugandan gay rights campaigner David Kato was beaten to death in a suspected hate crime.
Nigeria's Senate is currently discussing a bill banning same-sex marriage that includes penalties for anyone witnessing or aiding a same-sex marriage.
A Department for International Development spokesman said budget support, which accounts for about five per cent of Britain’s annual aid budget of £7.46bn, is conditional direct assistance to governments. To qualify, recipients must adhere to rules on poverty reduction, respect of human rights, good governance and domestic accountability.