Campaigners from the lesbian, gay, bisexual and transgender community were “gobsmacked” after discovering that transsexualism had been listed alongside serious mental illnesses on Camden Council housing forms.

The term, denounced as “insensitive and upsetting” by representatives of Camden’s transgender community, appeared in the same bracket as dementia, severe alcoholism and schizophrenia.

It has led to concerns that the council risks undoing campaigns to rid the transgender community of a stigma that branded its members mentally ill.

Nigel Harris, acting director of Camden LGBT [lesbian, gay, bisexual and transgender] Forum, said: “My colleagues and I were gobsmacked to see it on the list.

“Firstly, the word transsexualism is archaic and loaded with connotations that bring back memories of discrimination and of it being seen as a disease.

“The fact that it’s listed alongside such serious mental illnesses is also very upsetting to the trans community, and it could cause real tensions if people are led to believe what the council appears to be saying.

“As of 2012, transsexualism and gender dysphoria are no longer diagnosed as a mental illness. Defining it as such is completely outdated and really quite offensive.”

While not a mental illness, gender dysphoria is viewed by medical professionals as a condition resulting from a person feeling a mismatch between their biological sex and their gender identity.

The transgender community, along with other groups, has long sought to rid medical classifications of their identity and to challenge the stigma that being gay or transgender was the result of a mental disorder.

Council bosses initially insisted that their classification was one taken from international medical guidelines.

It was later pointed out that the council, which prides itself on its record of supporting equality in the LGBT community, was using out-dated manuals that at one point also listed being gay as a mental illness.

A council spokesman said: “The council has not sought to cause offence, however, gender identity disorders are classified by medical professionals within the category of mental health and are diagnosed as such.

“We always seek to promote inclusion and equality across the community regardless of race, religion, gender and sexuality.

“After speaking to our medical assessment officer we will be changing the following terms on our forms; ‘mental illness’ to ‘mental health condition’, and ‘transsexualism’ to ‘gender dysphoria’.”