Pride Toronto has reversed its decision to ban signs carrying the phrase "Israeli apartheid" during the annual Pride parade July 4.

The words were banned earlier this year because the Pride group receives funding from the city based on the city's anti-discrimination policy. Under that policy, the words "Israeli apartheid" are deemed discriminatory.

Tracey Sandilands, executive director of Pride Toronto, said the group was given legal advice that determined it's the city's responsibility to rule on such issues.

"We found out that we are not responsible for interpreting the policies of the city," Sandilands told CBC News. Over the coming days, Pride parade participants will receive a copy of the city's anti-discrimination policy, with a request to sign and return it ahead of the parade.

"So we are putting the ball back into the court of the city," she said.

In May, Toronto Pride moved to ban the phrase after city politicians and Jewish groups complained about plans by the activist group Queers Against Israeli Apartheid to march in the Toronto parade.

Difficult decision

That decision stirred a backlash from some leaders in the gay and lesbian community, who decried the ban as censorship. The issue reached a crisis point for the organization in June, when 20 winners of Pride awards declined their accolades to protest the ban.

Sandilands said the issue has been an overriding worry for Pride organizers.

"We've been in a difficult situation," she said. "We made the best decision we could with the information we had at the time. We were concerned this was going to consume the parade. I'm really glad that we see a light at the end of the tunnel."

Pride Week runs from June 25 to July 4 and attracts more than one million visitors to Toronto.