By Michael Howard Saul And Sophia Hollander 

The decision by organizers of the St. Patrick's Day Parade on Fifth Avenue to permit one gay group to march next year drew praise from many quarters, but some gay activists and elected officials said the change wasn't sufficient and reflected inconsistencies in the parade's policies.

Parade organizers said Wednesday that they invited one gay organization, Out@NBCUniversal, a group of openly gay employees at NBC, to march in next year's parade. Other gay groups may apply for consideration in 2016, a spokesman for the parade organizers said.

Mayor Bill de Blasio, who boycotted the parade this year because of its policy on gay groups, described the announcement as progress and a "step forward for inclusion." But Mr. de Blasio, the first mayor in 20 years to boycott the event, said the city needs a "truly inclusive parade" and he wouldn't make a decision on whether to march next year until he learns more.

Roman Catholic Cardinal Timothy Dolan called the policy change "wise" and said the parade organizers had his "confidence and support."

It was the latest chapter for the city's oldest parade, which was started in 1762 by homesick Irish soldiers stationed in the colonies. Over the past two centuries, it has grown into one of the largest parades in the world, drawing hundreds of thousands of marchers and spectators to Midtown every year.

The announcement comes after decades of controversy and protests over a policy that effectively prevented openly gay groups from marching. The policy banned any displays of gay identification, such as banners, flags and pins.

Last year, Guinness pulled its sponsorship a day before the parade. Although all the funds had already been donated--and weren't withdrawn--Guinness hadn't planned to contribute this year, a spokeswoman said. She said the company is now "open to talking with the organizers" about potentially restoring their sponsorship this year.

Some gay activists said they hoped elected officials and others would continue to boycott the parade until organizers permit full inclusion. Others said they would join the NBC group if invited; parade organizers have said the NBC group is free to invite anyone to march as part of its contingent.

"It's a welcome baby step, but sadly it's still not enough," said state Sen. Brad Hoylman, a Manhattan Democrat who is openly gay. "The fact is that Irish LGBT organizations are still not permitted to march under their own banner in one of New York City's most widely celebrated parades."

Emmaia Gelman, a spokeswoman for Irish Queers, an organization that has protested the parade's policy on gay groups, said allowing the NBC group, which isn't affiliated with Irish heritage, to march demonstrates that parade organizers are more concerned with corporate connections than its relationship with the Irish community.

"My interest in marching in the St. Patrick's Day Parade is to celebrate my identity and community as an Irish LGBT person," Ms. Gelman said.

A spokesman for the parade said the organizers' long relationship with NBC played a role in allowing the group to participate. WNBC has broadcast the parade for many years.

Christine Quinn, a former City Council speaker who unsuccessfully ran for mayor last year, said she and her 88-year-old father would march with the NBC group if invited. "This is progress, and one can be both grateful and not fully satisfied at the same time," said Ms. Quinn, who is openly gay.

Bill Donohue, president of the Catholic League, said he would accept the new policy, although he voiced disappointment that organizers were "being forced by the moneyed interests to make these changes," noting that some of the parade's corporate sponsors recently withdrew.

Eileen Cronin, a retiree from Nassau County, stood up at a news conference Wednesday evening and accused the organizers of "bending to pressure" from the mayor and others. "I think it stinks because then you are going to have everybody in creation wanting to march down the avenue and it's going to turn the parade into a fiasco," she said.

As part of the change in policy, the organizers also will now let a "pro-life" group march with a banner, said parade spokesman William O'Reilly.

Asked if a group that supports abortion rights will be permitted to march with a banner as well, Mr. O'Reilly was noncommittal.

"Anyone can apply," he said.

That drew criticism from some abortion rights groups. "We would be concerned if the rules were written such that no pro-choice groups could march," said Andrea Miller, president at NARAL Pro-Choice New York.

Write to Michael Howard Saul at michael.saul@wsj.com and Sophia Hollander at sophia.hollander@wsj.com

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