Kemi Badenoch has suggested firms should make transgender staff and customers use disabled toilets after a Supreme Court ruling.
The Conservative Party leader said it would be an alternative to spending money on new gender neutral facilities for trans people, after they were blocked from using those of the gender they identify with.
She appeared on Good Morning Britain after the court declared that the words 'woman' and 'sex' in the Equality Act refer to a biological woman and biological sex.
The ruling has been interpreted to mean that transgender women, who are biologically male but identify as women, can be excluded from women-only spaces like toilets and changing rooms.
This has raised the question of which toilets they should use, which Mrs Badenoch said was 'not as complex a situation as it's often made out to be.'
Asked if transgender people should have separate toilet facilities, she told Susanna Reid and Ed Balls: 'Most, if not all, organisations have a way of dealing with this. Not having gender neutral loos is one of the easiest things that you can do.
'Almost all businesses I see have disabled loos. They are unisex, different from gender neutral. Trans people can use those.
'But if you are providing a single sex space, it has to be a single sex space.'
The Conservative Party leader said it would be an alternative to firms forking out to create separate facilities for trans people, after they were blocked from using those of the gender they identify with.
The ruling has been interpreted to mean that transgender women, who are biologically male but identify as women, can be excluded from women-only spaces like toilets and changing rooms.
'The thing that has created the biggest problem isn't trans people, it is predatory men who used lax rules to say, oh, actually, I'm a woman now, I'm going to women's loos,' she added.
She said she had put out regulations around toilets two years ago and that 'lots of people laughed at the time'.
Yesterday a senior minister confirmed trans civil servants and public sector workers will be barred from using toilets and changing rooms for their identifying gender.
Pat McFadden confirmed that the Government will follow the EHRC guidance. But the Cabinet Office Minister also admitted in an interview that there would be no 'toilet police' standing outside bathrooms to check the rules were being implemented properly.
Asked by the BBC's Sunday with Laura Kuenssberg what steps the Government would take, Mr McFadden said the 'logical consequence' was 'that people use the facilities of their biological sex'.
But asked if it meant transgender people would be banned from using the toilets of the gender they identify as, Mr McFadden said: 'Look, in reality, when you say ban, am I going to be standing outside toilets? I'm probably not - there isn't going to be toilet police.'
Over the Easter period, the Supreme Court declared that the words 'woman' and 'sex' in the Equality Act refer to a biological woman and biological sex.
The ruling has been interpreted to mean that trans women, who are biologically male but identify as women, can be excluded from women-only spaces like toilets and changing rooms.
The guidance has been released because 'many people have questions about the judgment and what it means for them', the EHRC said.
Schools must provide single-sex changing facilities to boys and girls over the age of eight, according to the new guidance.
'Suitable alternative provisions may be required' for trans pupils, the watchdog said, as trans girls 'should not be permitted to use the girls' toilet or changing facilities, and pupils who identify as trans boys (biological girls) should not be permitted to use the boys' toilet or changing facilities'.
The watchdog also said that sports clubs and other associations of 25 or more people are allowed to be exclusively for biological men or women.
Such clubs 'can be limited to people who each have two protected characteristics', the guidance said.
This would mean, for example, that a lesbian women's sports club should not admit trans women.
The watchdog is working on a more detailed code of practice following the Supreme Court ruling, which it said it aims to provide to the Government for ministerial approval by June.
