GAY rights advocate Rodney Croome has rejected Prime Minister Kevin Rudd's suggested referendum on gay marriage, saying it would be expensive and divisive.

On Friday, Mr Rudd said he would consider holding a plebiscite or referendum, if Opposition Leader Tony Abbott did not allow Coalition MPs a conscience vote on gay marriage.

Mr Croome, who is national director of Australian Marriage Equality, said while he welcomed Mr Rudd's support for gay marriage, he felt a referendum or plebiscite would only fuel hatred and fear-mongering.

"In the recent Tasmanian upper house election, there were hateful pamphlets distributed, and if we had a national referendum that would increase 100 times ... it would serve as a platform for the worse kinds of hatred," Mr Croome said.

"So far, the debate has been relatively mature and calm, and I don't think Australia wants to see that degenerate."

Mr Croome said a referendum or plebiscite would be expensive, and would not necessarily bring change.

"A referendum is a vote on what the constitution means by the term marriage, then it's put back on Parliament to vote to change the law," Mr Croome said.

"A plebiscite is non- binding, so it also comes back to the politicians' final decision.

"So that just means we go through an expensive and divisive process, only to end up where we are now."

Mr Croome said he had written to Mr Rudd asking him to instead initiate a cross-party working group to advance the issue.

He said the appointment of Mr Rudd, Australia's first Prime Minister to support marriage equality, would increase momentum for gay rights.