Hong Kong: A Cathay Pacific advert featuring two men holding hands can now be displayed across Hong Kong's transport network after its reported ban sparked a public outcry.

Hong Kong newspaper South China Morning Post reported Monday that the city's airport and MTR train operator had barred the gay-friendly ad from its crowded terminals, citing sources.

The news emerged just after Taiwan's parliament legalised same-sex marriage last week in a landmark first for Asia, placing the island at the vanguard of the region's burgeoning gay rights movement.

By contrast, campaigners have criticised semi-autonomous Hong Kong for lagging behind on equality issues.

Neither Cathay Pacific nor the transport authorities directly confirmed or denied the ban which triggered a massive backlash.

LGBT group Big Love Alliance launched a campaign on Monday encouraging Hong Kongers to share on social media photos of themselves holding hands with their same-sex partners or friends at the airport or the MTR.

As public pressure mounted, airport authorities said on Tuesday the advert now had their full blessing.

The ad is deemed "not an infringement of the Airport Authority's established guidelines on advertisements displayed in the terminal", a spokesperson said in a statement.

JCDecaux, an agency that handles advertising bookings for the MTR Corporation, also appeared to have reversed course.

"We have advised... that the design can be posted at MTR stations," a JCDecaux spokeswoman in Hong Kong told AFP.

Ray Chan, Hong Kong's first openly gay lawmaker, welcomed the move saying public and media pressure has made transport officials and their advertising agencies "right their wrong".

The city airport is operated by a Hong Kong government body, while the MTR Corporation is majority-owned by the government.

Hong Kong does not recognise same-sex marriage or civil unions and only decriminalised homosexuality in 1991.

But a British lesbian won the right to live and work in Hong Kong with her partner in a landmark ruling last year hailed by rights groups.

A separate case has been lodged by two Hong Kong men directly challenging the same-sex marriage ban as unconstitutional.