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Dennis Garnhum, artistic director of the Grand Theatre in London, Ont., poses for a photograph on Jan. 18, 2018.GEOFF ROBINS

A southwestern Ontario public school board has reversed its decision to drop funding for a musical about a gay teenager's fight to take his boyfriend to the prom after an outcry from the community. But the local Catholic district is refusing to back down from a decision to pull its sponsorship.

For the past two decades,The Grand Theatre in London, Ont., has done an annual production in which local high school students act and do stage management. This year's show, the musical Prom Queen, is set to run in the fall and chronicles an Oshawa student's fight against his Catholic school board.

The Thames Valley District School Board and the London District Catholic School Board read the script and decided earlier this month, for the first time in 20 years, to withdraw their annual funding of $15,000 each. The boards said the musical did not reflect their culture of supporting all students, and contained too much profanity.

But after the boards' actions became public last week, many local residents criticized the decisions. An online campaign to replace the sponsorships raised more than $58,000.

At a board meeting on Tuesday night, Thames Valley school officials said they would restore the $15,000.

"We must be clear to the community that a mistake was made in this case," Matt Reid, chair of the Thames Valley school board, said at the meeting. "While our administration had the best of intentions, the actions were unfortunately viewed by those in the public as rooted in homophobia, and for this I am sorry."

In an interview on Wednesday, Mr. Reid said the board will provide resources so that schools are equipped to handle the mature and sensitive topics in the musical. It will also require parental consent for students to see it, which is not uncommon.

"There was definitely a lot of concern from people who thought the decision was rooted in homophobia," Mr. Reid said. "That was never the intention of the administration, but that was the perception from the public. We tried to make sure people understood that we are very supportive of the LGBTQ community. I'm happy that we are able to now move forward and find a solution that ensures students are able to see this production, but also that some of the concerns with the mature content are going to be addressed and we'll have informed parental consent."

Mark Adkinson, a spokesman for the London Catholic board, said in a statement that the Grand Theatre provides "valuable opportunities" for students, but he did not indicate that the board would reverse its decision.

Prom Queen is based on the story of Marc Hall, a student from Oshawa, Ont., who won a legal battle against the Durham Catholic District School Board in 2002 to bring his partner to his school's prom. As many as 50 students will participate in the show on stage, and another 30 in production.

Deb Harvey, executive director of the Grand Theatre, said she was "overwhelmed" by the community's response. "Our city has told us very strongly who they are and we couldn't be more pleased to have the support of the community," she said.

Ms. Harvey described the recent events as a "blip in our history." She said the extra money raised through the campaign will go into the high school project.