Single-sex toilets and changing rooms in England, Wales and Scotland must exclude transgender men and women, according to a new code of practice from the equalities watchdog.

But the long-awaited guidance also says that businesses and service providers have to offer practical alternatives such as gender-neutral toilets for people who do not wish to use services for their biological sex.

The Equality and Human Rights Commission (EHRC) document sets out how public bodies, businesses and other service providers should respond in practical terms to April 2025’s landmark supreme court ruling that sex in the Equality Act refers only to biological sex.

The guidance will be seen as an incremental victory for gender-critical campaigners, who have long argued that trans women specifically should be excluded from women-only services. But critics fear it will consolidate a chilling effect as trans people avoid public places altogether.

Trans advocacy groups had hoped that amendments made to the code by the EHRC in April, after feedback from the government, as well as consultation responses and extra legal advice, might result in a less blanket exclusion.

The guidance does suggest it is feasible for clubs and associations to remain trans inclusive, by making themselves open to several protected characteristics at once, for example women or men and trans people.

But in healthcare, where mixed-sex accommodation is not available, trans patients must be accommodated on the single-sex ward that accords with their biological sex. But the code also states it would not be proportionate to exclude a trans man from obstetrics and gynaecology outpatient services based on the objections of female patients.

The guidance is clear that if a service provider admits a trans person to a service that aligns to their lived gender, that service can no longer be described as single sex and the provider is “very likely” to be at risk of legal challenge.

The chair of the EHRC, Mary-Ann Stephenson, said: “The supreme court was very clear … if you are providing separate toilets for women and men, that has to be on the basis of biological sex.”

Stephenson suggested that people had “got caught up in a hyperfocus on which toilets can trans women use”.

She said: “It would take a lot of the heat out and we might be able to provide some solutions if we could take a bigger step back and say ‘lots of us have different needs in terms of accessing toilets’.”

She called for a “wider conversation about how we make that work in practice”, referring to services supporting women who are escaping violence, where a provider will often provide a variety of accommodation including communal space and self-contained accommodation, which it might offer to women who have teenage sons, for example, or to trans women.

While campaign groups continued to digest the 340-page document on Thursday evening, early responses reflected continued divisions over how to interpret the supreme court ruling.

The Trans+ Solidarity Alliance director, Alexandra Parmar-Yee, said the guidance was “a section 28 moment for this Labour government” and “worryingly similar to a US bathroom ban condemned by the UK Foreign Office in 2016”.

“The law here is a mess, and clearly many businesses will just go gender neutral to avoid the headache, but the government risks pushing trans people yet further out of public life.”

For Women Scotland, the gender-critical campaign group that brought the original case to the supreme court and has heavily criticised the length of time taken by the UK government to review the code described this as “a significant milestone in ensuring women’s rights are upheld and protected across the UK”.

Co-founder Susan Smith said: “Hopefully, this will put an end to the unjustified excuses and delays in implementing the supreme court ruling. There is now no reason for public bodies and organisations to evade their responsibilities to women.”

The updated code of practice for service providers, associations and those delivering public functions – which remains in draft form – was laid before parliament by the equalities minister, Bridget Phillipson, on Thursday afternoon. MPs now have 40 days to consider the document before the minister issues a final order and it comes into force across England, Scotland and Wales.

In a written statement, Phillipson said the draft code’s content on sex and gender reassignment had “changed substantially” in light of the supreme court’s judgment and thanked the commission for its work ensuring the document was “accessible and provides a wide range of examples for duty bearers”.

Many businesses have raised concerns that the required changes could undermine inclusion, and be unworkable, for example, in hospitality, where venues differ drastically in terms of size, space and age of buildings.

The code gives the example of renovation to a shopping centre. The management recognises that providing only male and female toilets would disadvantage trans users and could cause safety risks and distress if they were required to use toilets designated for those of the same biological sex. “The service provider therefore decides to also provide toilets in individual lockable rooms with hand basins, which can be used by people of either sex.”

This cost would be borne by the business itself. When the Equality Act 2010 was passed, the impact assessment estimated costs in the first year alone could amount to more than £300m.

Another example concerns a community advice centre with single-sex toilets extending the use of its accessible toilets to trans people. The code advises the group to monitor whether this arrangement has any negative impact on both trans and disabled people. Disabled rights campaigners have previously told the Guardian they were watching “in horror” as the trans community faces similar toilet segregation and exclusion from public spaces that they do.

The guidance states that while it is unlikely to be “practical or appropriate” to question an individual using single sex facilities, such as toilets, about their sex, it may be legitimate if concerns are raised about that person’s “physical appearance, behaviour or concerns raised by other service users”.