Welfare Reform Minister Lord Freud's comments suggesting that some disabled people are "not worth" the minimum wage were "offensive", Nick Clegg has said.
The minister is to remain in his job after issuing a "full and unreserved apology", but has been withdrawn from his duties in the House of Lords today. Clegg said his comments had "cause huge offence" and "touched a raw nerve".
Labour demanded the Conservative minister's resignation over the remark, which sparked anger from disability charities and trade unions.
But David Cameron's official spokesman said the Prime Minister has full confidence in Lord Freud in the light of his apology and wants "all Government ministers to be getting on with implementing policy".
Cameron flatly disowned the peer's remarks when ambushed by Labour leader Ed Miliband at Prime Minister's Questions and later ordered him to apologise.
Lord Freud has been withdrawn from frontbench duties in the House of Lords, where he had been scheduled to reply to a question and represent the government in a debate.
The Department for Work and Pensions said the peer "isn't available" but gave no further details of why he was being replaced by colleagues.
On his LBC Radio phone-in show, Clegg said: "I think what was so offensive to people about the remarks recorded at the Conservative Party Conference that Lord Freud made was when he used this word 'worth' and he said some people with disabilities weren't worth the minimum wage. I think that is what has, quite rightly, touched a raw nerve because it's making a comment about someone's individual value. I think that was just so offensive to people."
He said there should be a "grown-up debate about how we can get more people with disability into employment" but added: "To say someone is not worth something, quite understandably that's just caused huge offence."
Lord Freud was recorded at a fringe meeting of last month's Conservative conference responding to Tunbridge Wells councillor David Scott, who expressed concern that some "mentally-damaged individuals" who want to work are unable to do so because employers were unwilling to pay them the £6.50-an-hour minimum wage.
The minister replied: "You make a really good point about the disabled ... There is a group - and I know exactly who you mean - where actually, as you say, they're not worth the full wage and actually I'm going to go and think about that particular issue, whether there is something we can do nationally, and without distorting the whole thing, which actually if someone wants to work for £2 an hour, and it's working, can we actually..."
Clegg said Lord Freud's comments were "deeply distressing and offensive to people".
The Deputy Prime Minister said: "That shouldn't stop any of us having a discussion and, frankly, a difficult discussion - because some of these issues are difficult - to get more people with disabilities and with other disadvantages in life into the workplace."
Asked if it was wrong for people who wanted to work for £2 an hour to be allowed to do so, Clegg said there were examples where it was accepted that people were paid below the usual level of the minimum wage. "As a society, we say it's acceptable to pay apprentices a different kind of minimum wage. We have a minimum wage operating on a different scale depending on your age," he said.
In a statement issued by Lord Freud, he said: "I would like to offer a full and unreserved apology. I was foolish to accept the premise of the question. To be clear, all disabled people should be paid at least the minimum wage, without exception, and I accept that it is offensive to suggest anything else.
"I care passionately about disabled people. I am proud to have played a full part in a Government that is fully committed to helping disabled people overcome the many barriers they face in finding employment."
He added: "I am profoundly sorry for any offence I have caused to any disabled people."
Asked whether Cameron had full confidence in the minister, the Prime Minister's spokesman said: "Yes, given that he has rightly made the full and unreserved apology."