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Jai Dara Latto was showered in adoration and applause when she was crowned Miss Transgender UK in London last September.
But the title was short lived after an organiser accused Latto of being a ‘drag queen’.
Director Rachael Bailey said Latto was ‘not transgender enough’ after she was sent a picture of the 22-year-old wearing boxers.
Latto, from Peeblesshire, Scotland, was subsequently stripped of her title after six months because she was not living as a full-time woman.
Now she has been forced to hand over her crown to the competition’s runner-up, Daisy Bell, 23.

In response to the claims, Latto said ‘being transgender is not some exclusive club’.
It seems to me that Rachael has based [her claims] on her subjective opinion from having viewed the documentary Miss Transgender, which is yet to be aired.
I gave consideration to sharing a letter from my doctor on my gender dysphoria [the feeling your psychological identity as male or female is opposite to your biological sex] but decided against it.
The documentary clearly shows me living full time in my community functioning on a daily basis interacting with family, friends and others in my desired gender role.
Rachael added that underwear is an important part of the transgender journey because it makes a person ‘ feel like [they] are finally a woman’.
The main prize sparked controversy at the time because it awarded £10,000 worth of surgery in India.
But Latto has now returned the prize and instead will be having the reassignment treatment in Scotland.
Bell will also receive the £5,000 cash prize and £3,000 modelling contract.
Latto is now planning to hike 30 miles in high heels to highlight the obstacles faced by those awaiting gender transition.
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