There was uproar on social media after the Chieftain called off a show by acoustic duo Warble and Strum at the last minute then posted on Facebook “we are not that type of pub”.
The post was reported to the police and logged as a ‘hate incident’.
The Chieftain has since apologised to the duo and said it was “a misunderstanding”.
Warble and Strum have accepted the apology and said they wanted to draw a line under the matter.
The row broke out after Warble and Strum, Andy Smith and Andrea Robinson from Leyland, turned up as scheduled to perform at the Pedder Street pub for a Saturday night gig.
They were accompanied by a friend who is transgender.
After the sound check, bar staff told Warble and Strum that management had cancelled the gig and they were asked to leave.
“We were just told to pack up and go,” Warble and Strum posted on their Facebook page.
“In over 35 years of gigging I have never experienced anything like this before.
“We have a very good friend who is trans-female who comes to most of our gigs and helps us to set up.”
The Chieftain Facebook page said the gig was cancelled “due to the artist not turning up fit to play and the man turning up dressed as a woman! We are not that type of pub.”
This post was later removed. A further post then said: “Our last post was not meant to cause any offence to anybody. Please note that we have no problem with anybody of the transgender community.”
Warble and Strum denied the claims that they were unfit to play and Chieftain landlord Mark Potter later said he’d been misinformed.
The duo received an outpouring of support with more then 29,000 people reading their Facebook posts.
Mr Potter later posted: “I have spoken to Andi & Andy and have apologised to them for the upset and bad feeling which has occurred from Saturday night and they seem to be satisfied with the outcome.
“There was no malice meant in the post from me, just very badly worded which is no-one’s fault but mine.
“To their friend again I apologise for any upset caused which was not intended.”
Warble and Strum said on Facebook they now “considered this matter closed”. They also said the Chieftain had agreed to pay them for the cancelled gig.
Andrea Robinson told The Visitor: “Mistakes were made and a lot of people were upset but they have apologised and realised they made a mistake, so we want to draw a line under it. What has been incredible is the amount of support we’ve had from other musicians.”
Mr Potter said: “It was a total misunderstanding.
“I wasn’t there on the night and what I was told (about the duo being unfit to play) was totally wrong.
“I know the two people, they have played for us before.”
A spokesman for Lancashire Police said they received a complaint from a third party about the Chieftain’s initial Facebook post. He said the complaint had been logged as a ‘hate incident’ and licensing staff would speak to the pub management.