The Church of England chaplain to the Stock Exchange is facing disciplinary action after he called on his website for homosexuals to be tattoed with health warnings such as "fellatio kills" and "sodomy can seriously damage your health."

The Rev Peter Mullen, a leading traditionalist who has campaigned for years for the restoration of the 1662 Book of Common Prayer to England's churches, also wrote some verse criticising the recent gay blessing service that took place at the City church of St Bartholomew the Great.

The gay rights group Stonewall said he should resign.

The Bishop of London, the Right Rev Richard Chartres, described the comments as "highly offensive."

Mr Mullen is one of the best-known clerical figures in the City but has for some time been courting controversy from the pulpit.

A number of senior figures in the City privately voiced their concerns earlier this year after his annual New Year service at his church, St Michael's Cornhill, at the heart of the world's leading financial district.

In that sermon he referred jokingly to God being incarnated as "the master of the Worshipful Company of Knicker Elastic."

He also compared the Archbishop of Canterbury Dr Rowan Williams to a "wraith-like political druid on his way to another synod debate on the pagan fantasy of global warming."

His latest comments came on his personal blog which he took down yesterday after readers complained to Bishop Chartres about the nature of his comments.

Mr Mullen, 66, wrote on his blog: 'It is time that religious believers began to recommend... discouragements of homosexual practices after the style of warnings on cigarette packets.Let us make it obligatory for homosexuals to have their backsides tattooed with the slogan SODOMY CAN SERIOUSLY DAMAGE YOUR HEALTH and their chins with FELLATIO KILLS.'

Mr Mullen, who is also rector of St Sepulchre without Newgate in the City, also called for all gay pride parades to be outlawed. He described them as "obscene."

In another post he wrote an ode to the blessing of two gay priests, celebrated by the Rev Martin Dudley at St Bartholomew the Great, also in the City. Bishop Chartres has launched an investigation into that service after traditionalists complained that it breached church guidelines that the church should not bless civil partnerships.

Mr Mullen wrote: "The Bishop of London is in a high huff, Because Dr Dudley has married a puff; And not just one puff - he's married another: Two priests, two puffs and either to other."

A spokesman for Bishop Chartres told The Times: "While clergy are entitled to their own personal views, we recognise that the content of this text is highly offensive and is in no way reflective of the views of the Diocese of London."

Clergy are entitled to remain in post in the Church of England until the age of 70 if they benefit from the security of tenure given by the freehold, which Mr Mullen enjoys. New disciplinary tribunals carried out in secret however have made it easier for bishops to oust clergy without the expense of a consistory court. Mr Mullen could face disciplinary action for an alleged offence such as conduct unbecoming a person in Holy Orders, but no action would be taken without a complaint.

Mr Mullen declined to comment.

In a previous posting, however, he made other comments that Muslims could fine offensive.

Anticipating an "agreeable carnage" at the start of the annual Hajj, the Muslim pilgrimage to Mecca, he wrote: "They usually manage to stampede and slaughter quite a few hundred of their co-religionists. Just imagine for a moment what a field day the BBC and the leftwing press in England would have if anything even remotely as bad as that happened in Vatican Square at Christmas or Easter." He said also that Muslims "certainly lend themselves to ridicule: sticking their arses in the air five times a day. How about a few little choruses, 'Randy Muslims when they die/Find 70 virgins in the sky'?"

The Bishop of London was first made aware of the blog in June.