Angry 8yr DS calling two older kids Gay and Lesbien

[Shout]

I caught my 8yr old DS calling 2 10yr old girls you gay and lesbiens. It is not the first time I have noticed him retaliating with unpleasant language when he is out with other children eg the Beer garden or the local Green. It appears that they pick on him and he doesnt know the best way to deal with it so starts saying rude things about them.
I have tried telling him to ignore them and by saying nasty things he is lowering himself to their level but it doesn't seem to be registering with him.

He also wants me to go and speak to the offending 'bullies' but I not always convinced he tells me the whole story and be I don't want to be an old fish wife shouting in the street. Ds says the other kids mothers stick up for them but he has nobody.

Any suggestions

Such is life! I have a 7 1/2 year old ds and he gets worked up really quickly especially if teased. I think 7 and 8 year olds are too young to understand the concept of 'don't lower yourself to their level', but I do think it's worth repeating that mantra as slowly it will begin to make sense to them. When put on the spot kids that age just react immediately to defend themselves. Sorry, not much help, but I can only think maturity will kick in at some stage.....