Huh. It’s not infrequently phrased as a musing “I wonder if he’s light in the loafers or just British.”
I think the last legitimate target for ridicule is that group of people who consider it still acceptable.
Classic bully statement. Easy for you to say when you’re the one making the fun as opposed to being made fun of. Try not being American on an English-speaking website.
Basically, the numebrs are in your favour on an English-speaking website, whether it be here, FARK, AICN, or anywhere else.
I blame Byron.
Neither have I, and I am British living in America. Certainly there are ways that many Europeans will dress/look/behave (think David Beckham, Roger Federer) that your average redneck would view as effeminate, but I have not come across a stereotype of “gay or British”.
There again, maybe it explains Lionel Blair.
Jesus fucking christ. 
Bullseye. I always wanted to win a speedboat or a caravan.
It’s a pretty old stereotype. Perhaps it’s not as pervasive as it used to be.
One year when I was in college I did a summer study tour in England, and stayed in London on my own for a couple of days after the tour ended. I was staying in Earl’s Court, and when I called home to talk to my family I mentioned to my younger sister that there were “a lot of gay guys around here.”
She quipped “In England? How can you tell?”
Anyway, I think the stereotype is specifically about the English and not the British in general. I’ve never heard my fellow Americans joking about Welshmen seeming gay. (Although I’m sure many Americans can’t tell the difference between the English and the Welsh to begin with.) And just for clarity, Americans can generally recognize an English accent, or at least identify it as a foreign accent. Few of us would hear an Englishman speaking and wonder if he were some type of foreigner or if he were just a gay American. The stereotype is more that Englishmen come across as gay to Americans. So you might hear something like “I can never tell if an Englishman is gay or not, because they all seem pretty gay to me” or “I thought he was gay until he opened his mouth, then I realized he was just English.”
I suspect this notion goes back at least as far as the American Revolution, when the English were probably stereotyped as weak and foppish. More recently, I can think of a few things that would help reinforce the stereotype. As mentioned above, the English people Americans are most likely to see in the media are actors and pop musicians, or to a lesser extent intellectuals, and men in these fields are often not that “macho” seeming. There are also a few English entertainers who are pretty well-known in the US and are actually gay, like George Michael and Rupert Everett. Single-sex schooling is more common in the UK than in the US, so Americans might assume that English teens are doing a lot of same-sex experimentation. And, as others have mentioned, the stereotypical upper class Englishman shares some traits with the stereotypical gay American man like being particular in his tastes and fastidious about his appearance and surroundings.
A related stereotype is that British and European men are better dressed and groomed than American men. It’s been my experience that this is often true. What isn’t always true but is a common American stereotype is that fashionable man = homosexual.
From “All In The Family”
Archie) England is a “fag” country.
Huh! And here all along I thought gays automatically got British citizenship. You know, like Jews can have Israeli citizenship.
I thought it was fairly common. I’m guilty of teasing “gay or British/European.” And I’m gay, you’d think I"d be more sensitive! 
Niles Crane on Frasier is a good example. Stephen Fry on QI seems gay. And he is. John Inman who played Mr. Humphries in Are You Being Served? is another example. Also gay though.
It’s just a stereotype, but sometimes when people think of a typical prim and oh so proper Brit, or maybe Englishman is more correct, they’re thinking of the Niles Crane type.
I doubt many people think Jason Statham is gay. James Bond as played by Roger Moore seemed a little gay sometimes.
There’s a long history of stereotypically associating homosexuality/effeminacy with the upper classes/aristocracy, and virility/brutishness/heterosexuality with the lower classes. At the same time, in North America we stereotypically think of British (and other European) things as posh. So the two combine to produce the “Gay or British?” stereotype. (Correspondingly, British things that are decidedly not posh don’t carry the association so much – “Gay or British?” rarely has a thickset Mancunian football hooligan as its object.)
Fred Truman was defintaly not gay.
Dickie Bird OTH?
Who actually was bisexual 
I think this is part of it. I’m not hugely familiar with American TV, so I don’t know how the ratios compare, but in Britain, a lot of TV presenters, especially of the “light entertainment”/comedy variety, are gay. British TV is pretty camp, a lot of the time.
A few examples, past and present, off the top of my head…
Stephen Fry
Graham Norton
Michael Barrymore
Alan Carr
Dale Winton
Gok Wan
Matt Lucas
Paul O’Grady
Kenny Everett
Frankie Howerd
Larry Grayson
Kenneth Williams
Christopher Biggins
While this may be true, it does not really address the OP’s question about gay or British. To support this saying, you really need to be finding examples of Brits who appear to be gay (to Americans) but are not.
Your fantasies are apparently quite different from mine.
Yeah, the stereotype is not that a lot of British men are gay, it’s that a lot of British men appear to be gay. Big difference there.
My family is British on my mother’s side. My cousin is a perfect example of the stereotype. He’s thin, neat, slight lisp, drinks tea, collects antiques, and acts “affected”. He’s straight, but an American with similar mannerisms would set off peoples’ gaydar.
That’s it exactly. It’s not that they “act gay” (whatever that means) but that they appear to be gay to an American.