Tesco has withdrawn an inflatable figure labelled "gay best friend" which it featured on its online store.
The supermarket giant said it was "very sorry" for the "offensive" product which was described on its website as an "amusing gift".
It comes a day after the retailer - along with Asda - apologised for advertising "psycho ward" and "mental patient" fancy dress outfits.
Tesco has since removed the advert and claimed that while the product description and picture could still be seen on its website this morning, none of the inflatables were sold and they have been unavailable for purchase for the last two months.
A Tesco spokesman said: "This product was uploaded to the website by a third party seller but was removed from sale immediately because we found it offensive.
"The webpage should have been removed at that time and we are looking into why it is still visible two months later.
"We have very clear guidelines for third party sellers who list items on our website, and are very sorry that on this occasion they weren't followed."
The description of the product, which had censored the word gay from its product title, said: "If SEX in the City and Will & Grace taught us anything, it's that g*y best friends are in this season.
"We've had the manbag, we've had leg warmers and iPhone fever, now it's time for the new craze.
"Although not much can be said for his own attire, your Inflatable g*y Best Friend is ready to give you fashion advice, tell you if your bum looks big and b**ch about everyone who doesn't wear Jimmy Choo's."
The inflatable was described as having a "Gary Lineker-esque face" and advertised as an "ideal gift" for hen nights, Christmas and birthdays.
A similar product called "Instant Inflatable Gay Best Friend" could also be found on the website of online retalier Amazon.
Gay rights charity Stonewall chief executive Ben Summerskill said: "This is like trying to sell ice to Eskimos.
"We can't imagine why any woman would choose to buy an inflatable gay best friend when there are two million of the real thing already available in modern Britain and most of them are much better looking than Tesco's pale imitation."
Yesterday Asda said it was to make a £25,000 donation to the mental health charity Mind after apologising for selling a ''mental patient fancy dress costume''.
The Halloween costume, which is designed to look like a blood-splattered straitjacket with ragged edges, was on sale for £20 through the supermarket's clothing arm George.
Asda's apology was quickly followed by Tesco, who said it was ''really sorry for any offence caused'' by an adult bright orange costume called ''Psycho Ward'' with the word ''Committed'' printed on the back.
The London Gay Men's Chorus, a group made up of over 200 gay men "of all shapes and sizes, of all ages and from different backgrounds", expressed offence at the asterisk in 'gay' on Tesco's website.
They also made an offer to the supermarket.
In a statement, a spokesman said: "It's a shame that Tesco have chosen to represent gay men in such a narrow-minded way, ignoring the true diversity of the gay community.
"What is more disappointing is that their website censored the word 'gay', when the term is neither offensive or risque.
"In response to this, we'd like to make an open offer to Tesco: We'd love to sing in one of their supermarkets, or even better, invite their management team to a performance so that they can see what gay best friends really look like.
"After all - best friends forgive and forget."
Human rights campaigner Peter Tatchell also expressed offence at the use of an asterisk in 'gay'.
He said: "The doll is cheap and tacky. Tesco's censorship of the word 'gay' is offensive.
"It is sad that the doll panders to tired stereotypes. I am sure that most girls would prefer a real gay best friend rather than a tiny plastic inflatable one.
"There is no problem with the doll being marketed to three to four year olds but I am not sure they would understand most of the advertising blurb, such as the reference to Jimmy Choo."
Pace, an organisation which supports LGBT people, said: "We were surprised to hear that in 2013 the 'gay best friend doll' was being stocked by Tesco who claim on their own website to 'always do the right thing, to inspire and to earn trust and loyalty form all [its] stakeholders'.
"Clearly, some people still subscribe to stereotypical views of gay people and these views continue to have negative consequences for gay people."
The spokesman said Tesco "needs to revisit its values and consider with more care its actions in the future".
What appears to be the same product is available on Amazon, and includes descriptions such as "Loves To Shop" and "Gives Great Fashion Tips".
In the product description section of the web page, it says: " Can't find the perfect friend to patiently listen to all your problems and give you advice!? Well here he is!! Once fully inflated this PVC doll stands at 50cm tall and looks like the perfect gay best friend.
"Everyone knows someone who is in need of a caring, stylish and funny friend!!! This is a hilarious gift! All of you girlies out there would love to have someone to patiently listen to you and give you advice.
"All you need to do is blow him up and you will instantly have a new gay best friend! He loves to shop, loves to dance, always listens to you, gives great fashion advice and most importantly will always tell you if your bum looks big.
"This PVC doll comes packaged in the colour box as seen in the picture which makes this the perfect funny gift for your friend or colleague!"
Also available on the site is a product called Grow Your Own Gay Best Friend.
Amazon has yet to respond to a request for comment.