Beleaguered Conservative candidate Philippa Stroud has declared she is not prejudiced against gay people.

Allegations surfaced in the Observer newspaper on Sunday that Philippa Stroud, who is hoping to win Sutton and Cheam on Thursday, founded a church that tried to “cure” gay people with prayers to “drive out their demons”.

The Observer newspaper quoted three people who claimed the King’s Arms Project in Bedford, which Mrs Stroud helped found in 1989, could help “change” them regarding their sexuality.

Mrs Stroud, who is head of Tory think-tank the Centre for Social Justice, worked at the project - which primarily helps drug addicts, the homeless and alcoholics - for about a decade.

In a statement Mrs Stroud did not respond to the key allegations, but said she made “no apology for being a committed Christian”.

She said: “It is categorically untrue that I believe homosexuality to be an illness and I am deeply offended that The Observer has suggested otherwise.

“I have spent 20 years working with disturbed people who society have turned their back on and are not often supported by state agencies; drug addicts, alcoholics, the mentally ill and the homeless that I and my charitable friends in the public sector have tried to help over the years.

“The idea that I am prejudiced against gay people is both false and insulting.”