PRESIDENT Donald Trump's administration on Wednesday revoked landmark guidance issued to public schools in defence of transgender student rights, reversing course on a signature initiative of former Democratic President Barack Obama.

Obama instructed public schools in May 2016 to allow transgender students to use the bathrooms matching their chosen gender identity, threatening to withhold federal funding if they should force transgender children to use bathrooms against their will.

The Obama guidelines had already been put on hold by a federal judge, but the Trump administration went ahead and withdrew them. The Justice and Education departments will continue to study the legal issues involved, according to the new, superseding guidance that will be sent to public schools across the country.

Reversing the Obama guidelines stands to inflame passions in the latest conflict in America between believers in traditional values and social progressives, and is likely to prompt more of the street protests that followed Trump's Nov. 8 election.

A couple hundred people gathered in front of the White House to protest the Republican president's action, waving rainbow flags and chanting: "No hate, no fear, trans students are welcome here." The rainbow flag is the symbol of lesbian, gay, bisexual and transgender people.

White House spokesman Sean Spicer said the White House was pressed to act now because of the pending U.S. Supreme Court case, G.G. versus Gloucester County School Board.

That case pits a Virginia transgender boy, Gavin Grimm, against officials who want to deny him use of the boys' room at his high school.

Although the Justice Department is not a party in the case, it typically would want to make its views heard. The Trump administration action on Wednesday also withdrew an Education Department letter in support of Grimm's case.

The federal law in question, known as Title IX, bans sex discrimination in education. But it remains unsettled whether Title IX protections extend to a person's gender identity.

Attorney General Jeff Sessions said in a statement that the Obama guidelines "did not contain sufficient legal analysis or explain how the interpretation was consistent with the language of Title IX."

He also said Congress, state legislatures and local governments were better-placed to address the issues than the executive branch.

"The Department of Justice remains committed to the proper interpretation and enforcement of Title IX and to its protections for all students, including LGBTQ students, from discrimination, bullying, and harassment," Sessions said.

The courts are likely to have the final say over whether Title IX covers transgender students. The Supreme Court could pass on that question in the Virginia case and allow lower courts to weigh in, or go ahead and decide what the law means.