For Donald Reid, a 44-year-old Edinburgh solicitor, it was a moment that had to be faced after the break-up of his 14-year marriage and his decision to move out of the family home and live openly as a gay man. The marriage had produced two sons, and Reid's ex-wife did not want them to be told about their father's sexuality.

"She was against me telling them because she was concerned for me," says Reid as he potters around the kitchen of his small, tidy flat in Leith, preparing for a dinner party. "Knowing how important the kids are to me, she didn't want anything to happen that would make them not want to have anything to do with me." Reid had to weigh the risk of losing his sons against his instinct to tell them the truth.

It was an agonising dilemma - but a more common one than many people would appreciate. Last week, the biggest ever survey of gay people in Scotland revealed that one in five are parents and a further17% would like to have children in the future. The organisation that organised the survey, Glasgow-based campaigning group Beyond Barriers, admitted the numbers were as much a surprise to the gay community as anyone else.

Reid says the question of how to come out to your children is one faced by hundreds, perhaps thousands of gay people across Scotland. His own story is, he says, not unusual. Five years ago he left the family home after he made a decision to come to terms with his sexuality. "The marriage didn't work," says Reid. "I had never identified as straight, but we married in 1983, and 20 years ago the world was a very different place."

After the break-up Reid made sure no-one was around when his children visited his home. The children found this strange. So gradually, he let the boys be part of his new life, and they began to get used to meeting gay and lesbian and transgender people at their dad's flat, and on trips to the cinema. They were curious, but comfortable. "They were used to queer people being around, which meant that when the time came they weren't making a quantum leap." However at one point they asked their mother: "Why are all dad's friends gay?" her response was: "You had better ask your father."

Reid beat them to it, but the momentous event turned out to be something of an anti-climax. "I just sat them down and said I had something to tell them. They were nine and seven at the time. I just said: 'I'm gay'. They said 'oh', and turned back to watch the telly. They didn't need a 16-page dissertation. You just impart the information and wait for the questions. They might not ask them at the time, but they will come."

Timing, he says, is probably the most crucial factor in coming out to children. "I think it is best doing it when they are young enough that it is of no real consequence to them. When they are in puberty themselves and dealing with their own sexuality you would be putting quite an imposition on them."

His main motivation for coming out to his children was the need to be honest with them. "I realised you can't live your life in boxes, being out to some people and not others. When you have a partner and the kids ask who this is, you can't say it is just a friend. That would be abusing your power as an adult over a child, denying them the truth and the space to discuss it."

Four years on, the extent to which Reid's sons now accept their father's sexuality can be seen from a recent shopping expedition. "I needed a party frock because I wanted to the party as Tammy Wynette. My youngest son came with me while I tried on some blouses in a second-hand shop." Was the 10-year-old embarrassed? "Of course - dads are always embarrassing."

Knowing that their dad is gay is, says Reid, actually simpler in some respects than having a heterosexual divorced dad. "When I came out first, one of the things the kids said was that this was really good because no-one was going to try to take mum's place. There would be no wicked step-mother."

The experience has not been entirely pain-free. A complicating factor is the reaction of the gay community itself, which has its conservative elements just like any other. To some gays, parenthood is simply not part of the accepted gay lifestyle. As a result, Reid effectively had to come out twice - first in the straight world as gay, and then in the gay world as a father. "At first I didn't tell anybody I was a dad. Absolutely nobody. Somehow one felt perhaps like a second class gay man because of the children. All these years later I see now how jealous many gay men are of the fact that we have children. One evening, one of my pals asked why I couldn't afford to do something to which I replied 'I have a couple of expensive habits' I meant my sons but he thought I meant drugs! Later, one friend told me he had been married and had kids, and it was such a relief." The founding two years ago of a support group, Gay Dads Scotland, has worn down this attitude, he says.

In the wider world, there were other considerations. Take the prejudice of the world at large that equated gay men with child abuse. "Gay man equals paedophile. You can see it people's eyes. We are the people who pervert children." Reid's response to simply be who he is. "I'm a poof who has kids. It's about self-respect."

Not everyone has as trouble-free an experience of coming out to children. Some of the stories told by men at Gay Dads Scotland meetings have been harrowing. One man delayed telling his son for years. When he finally plucked up the courage, the teenage son's response was: "Why did you lie to me?"

Of the men at these meetings, Reid is in the minority. "Most of them haven't come out to their kids," he says. The reasons are many - it can be generational, religious, cultural, or simply down to their family circumstances. "We don't pressurise them. It is a support group." Often this means the children are the last people to know that their dad is gay.

One man who is mentally tussling with whether or not to tell is John (not his real name), who is in his 40s and has been divorced for four months after a 10-year marriage foundered because of his sexuality. His two primary school-age sons do not know the truth about why their mum and dad split.

"I would like the knowledge that they have a gay dad to be like wallpaper in their lives. But I fear how they will be treated at school if it becomes known, that it will be used as something to hit them around the head with. I'm concerned about protecting them from straight society rather than gay society."

One difference is the cultural gulf between John's children's home life and the new life being led by their father. Nevertheless, he had been preparing the ground for the big revelation, discussing with his sons "how people may be different, and why that makes the world a more interesting place". But still he is unsure whether he can face them with the truth. "I put off admitting it to myself for long enough - there's always the temptation to do the same with the children."

For the time being, for many gay dads, the truth about Santa, babies and death will have to do.

By Kenny Farquharson for The Sunday Times Reproduced with thanks.