The legal rights of transsexual people have been transformed in a generation.

Thirty-three years after Mr Justice Ormrod pondered the concept of capacity to marry in Corbett v Corbett [1971] P 83 and ruled that a person's sex was legally fixed at birth, Parliament is putting the finishing touches to a Bill to give gender-reassigned people full recognition in their new gender.

Those able to satisfy a proposed gender recognition panel that they have or have had 'gender dysphoria' - a feeling of unhappiness relating to their sex - and have lived in their acquired gender for two years, would be eligible for a certificate confirming their status and, hence, rights.

They would be able to marry in their acquired gender; their parenthood and inheritance rights would, expressly, be unaffected; and privacy would be protected by a prohibition on disclosure of sensitive information.

The pace of change has increased in tandem with medical advances in hormone therapy and reconstructive surgery.

Indeed, the planned legislative reform comes after a series of high-profile cases tackling illegal discrimination against transsexual people in employment, family and pensions law.

Earlier this month, in A v Chief Constable of West Yorkshire Police [2004] UKHL 21, the House of Lords gave judgment in favour of a post-operative male-to-female transsexual job applicant, who had been refused employment as a police constable on the basis that she would be unable to conduct intimate searches on either men or women suspects.

Reviewing European law, including article 2(1) of the European Equal Treatment Directive, which prohibits any 'discrimination whatsoever on grounds of sex either directly or indirectly', Lord Bingham said no one could reasonably object to such a search.

A was backed by the Equal Opportunities Commission.

Its chairwoman, Julie Mellor, said: 'This ruling makes it crystal clear that employers must treat transsexual people applying for a job in line with the sex in which they live.

'The thousands of transsexual people who live in Britain today need to be able to get on with their lives without constantly battling discrimination.

That includes not having their range of job opportunities restricted as a result of undergoing gender reassignment.'

Domestic law is likely to get its face-lift soon - the Gender Recognition Bill was passed by the House of Lords in February and is back in the Commons for report stage and third reading on a date to be announced.

But the road to equal treatment for transsexual people in all areas of life has been tortuous.

The UK has found itself criticised by the European Court of Human Rights and the European Court of Justice for dragging its feet on reform and infringing individuals' rights under article 8 (right to respect for private life) and article 12 (right to marry) of the European Convention on Human Rights.

And although the Law Lords have now, to quote Lord Bingham, acknowledged 'the part which the convention has played in shaping the current European understanding of what fundamental human rights mean and require', reform remains controversial, particularly for religious groups.

Christian group the Evangelical Alliance, for example, claims the Bill is 'intellectually based on absurdities'.

Its public affairs manager, Don Horrocks, refers inquiring journalists to the group's Web site, which states: 'There is no evidence to show that sex can be determined in any way other than biologically.

'However, the government has simply decided that to afford transsexual people human rights (to be approved of in itself), it must legislate to create artificially the fiction of a biological man (for example) becoming a "legal" woman, with the "legal" gender taking precedence over the true biological birth sex.'

Against this stance, pressure groups such as Brighton-based charity The Gender Trust and Press for Change, which was co-founded by Manchester Metropolitan University legal academic Stephen Whittle, have used test cases and the Internet to campaign for recognition.

Mr Whittle, who underwent female-to-male gender reassignment in 1975, says: 'The situation now is so much better than it used to be.

We used the Internet to trace and support people who could bring cases, and benefited from pro bono work by lawyers such as David Burgess and Nicholas Blake.

'We actually lost more than we won, but if we hadn't campaigned and realised that some of us had to take a risk, we weren't going to get anywhere.'

He says reform is difficult to secure in this country if you are in a voting minority, but he nevertheless describes anti-discrimination initiatives under New Labour as 'astonishingly good'.

Angela Clayton, a company physicist and chairwoman of The Gender Trust, says the social climate has been 'completely transformed' in recent years.

When she first experienced gender dysphoria in 1978, a GP warned her she would be 'institutionalised' if she refused to toe the line.

'The level of understanding is just beyond belief compared to 25 years ago,' she says.

'We've gone from being victims of ridicule, if not outright abuse, to a situation where for many it's not really a large issue today.'

She describes the Bill as 'fabulous' for most transsexual people but contends that it is of fairly narrow import, leaving some generalised discrimination flourishing below the radar, with some pub landlords, for example, still refusing to let transsexual people use their toilets.

She is also concerned that there should be rigorous safeguards to prevent confidential information being disclosed through innovations such as ID cards.

Stephen Whittle's main criticism of the Bill is that married couples, typically elderly, who have stayed together as friends even though one has undergone gender reassignment, will be dissuaded from applying for a recognition certificate because it would lead to their life-long marriage being annulled because of the ban on same-sex marriages.

Gender dysphoria is estimated to affect about 1 in 10,000 people.

Mr Whittle estimates that some 5,000 people in the UK could qualify for gender recognition certificates under the new legislation.

But while transsexual people welcome legal reform, experts say gender and sexuality are so complex that the law in general may be inherently unsuited to dealing with them.

Lynne Segal, professor of psychology and gender studies at Birkbeck College in London, says it is impossible to box gender into clear-cut categories of masculine and feminine.

In her opinion, gender is a fluid concept that poses 'perhaps a challenge too far for the law'.

The issue continues to generate headlines, and the controversy seems unlikely to disappear overnight.

Earlier this month, Canadian David Reimer, who underwent reconstructive surgery to be brought up as a girl after a botched circumcision as a boy in 1966, committed suicide.

As an adult, he had undergone phalloplasty surgery to become male again.

His twin brother, Brian, killed himself two years ago with an over-dose of drugs he was taking for schizophrenia.

A Sunday newspaper recently reported that a male-to-female transsexual person from the London area was trying to have a child with her gay partner, using sperm frozen before reassignment surgery.

The couple had travelled to the US for their embryos to be screened to ensure the baby was also female, provoking religious groups to brand it a 'hazardous social experiment' and 'gross distortion of human relationships'.

This is an area where the law will always be catching up with the reality of life for many transsexual people, and the issues thrown up by medical advances.

But for many, the law is making rapid strides to assimilating them into the community and is a force for good.

Nigel Hanson is a freelance journalist