Christian bakers in Oregon have been told by a state agency that their bakery broke the law by denying a lesbian couple a wedding cake.

Aaron and Melissa Klein have spent the last year fighting a discrimination challenge by Rachel Cryer and partner Laurel Bowman.

Last Friday, spokesperson for the Oregon Bureau of Labor and Industries, Charlie Burr, was reported in the Mail Tribune confirming that there was "substantial evidence that Sweet Cakes by Melissa unlawfully discriminated against the couple based on their sexual orientation".

The dispute arose in January last year, when Cryer went to the bakery in Portland's suburb of Gresham and enquired about a wedding cake.

When Aaron Klein asked for the wedding date and the names of the bride and groom, she told revealed that the wedding would in fact involve two brides.

"[Mr Klein] cited a religious belief for [the] refusal to make cakes for same-sex couples planning to marry," she stated.

This resulted in widespread media attention as well as considerable harassment against the Kleins, who were forced to close their shop and operate their business out of their home.

Even there, they were not safe and their company van was broken into and scrawled 'bigot' on the back window.

"Somebody came up into our driveway and rummaged through our truck and took stuff out," said Ms Klein. "The really strange thing is, they didn't steal anything, they just made a mess. It kind of was a little creepy."

Commenting on the recent judgement, local newspaper 'The Oregonian' reported that in an effort to resolve the situation, the state will oversee a conciliation process to see if the parties can reach a settlement.

Failing that, the Labor Bureau may pursue charges before an administrative law judge.

A 2007 Oregon state law bans discrimination against gay, lesbian, bisexual and transgender people in jobs and in public service places.

While there are exemptions for religious organisations and schools, there are none for private businesses owned by religious people.

Speaking to the press, Mr Klein was quoted on TheBlaze.com as saying: "We still stand by what we believe from the beginning...I'm not sure what the future holds, but as far as where we're at right now... it's almost as if the state is hostile toward Christian businesses."

Herbert Grey, the Kleins' attorney, expressed alarm at the possibility of formal charges. In a press release from the Family Research Council, he is quoted as saying: "They're being punished by the state of Oregon for refusing to participate in an event the state of Oregon does not recognise."

The state of Oregon does not allow same sex marriages to be performed, but it does recognise those conducted in other states.

Since 2004 the Oregon State Constitution has said "It is the policy of Oregon, and its political subdivisions, that only a marriage between one man and one woman shall be valid or legally recognised as a marriage."

Paul Thompson, a lawyer for Ms Cryer and Ms Bowman, was reported in ABC News as saying his clients consider the recent findings bittersweet. They are "as pleased as they can be" that the investigation determined they experienced discrimination.

Melissa Klein publically thanked all those who had been praying for the ruling. In a Facebook post to her 12,000 fans, she said: "I know that your prayers are being heard. I feel such a peace with all of this that is going on.

"Even though there are days that are hard... we still feel that the Lord is in this. It is His fight and our situation is in His hands."