Downing Street has insisted it did not put pressure on one of the UK's leading business organisations to suspend its leader over comments suggesting the country could have a "brighter" future outside the European Union.
Number 10 said it was "surprised" by the views expressed by John Longworth, director general of the British Chambers of Commerce (BCC) and acknowledged that it "regularly" speaks to business organisations.
But a spokesman stressed that "no pressure" was put on the BCC to suspend Mr Longworth, a decision which was branded "scandalous" by Brexit-backing London mayor Boris Johnson.
The mayor claimed that Mr Longworth had become a victim of Project Fear - the label used by Brexit campaigners to criticise the tactics used by David Cameron and his allies backing a Remain vote.
Mr Johnson said: "It is absolutely scandalous that John Longworth has been forced to step aside.
"This is a man who reached the conclusion - after long reflection and a lifetime's experience of business - that it would be better to vote Leave.
"His verdict reflects the reality - that the EU has changed out of all recognition from the Common Market that this country joined.
"He speaks for the many small and medium sized businesses - the lifeblood of the economy - who cannot understand why they should comply with more and more regulation, over which this country has no democratic control.
"Only 5% cent of UK firms do business with the rest of Europe, and yet they must obey 100% of EU legislation.
"The British public deserve to have the facts put before them. They deserve a proper debate.
"It cannot be right that when someone has the guts to dissent from the establishment line, he or she is immediately crushed by the agents of Project Fear."
The Sunday Telegraph said a friend of Mr Longworth claimed Downing Street had "bullied" and been "putting pressure" on BCC board members to suspend their director-general.
Senior Tory backbencher David Davis demanded a clear statement by 10 Downing Street "that the Government was not involved in pressurising the BCC into suspending Mr Longworth".
He added: "We need to know there was no contact between ministers and their officials before Friday's BCC board meeting that took the decision to suspend its chief.
"Downing Street has form in this respect. It has already admitted it made a 'mistake' in adding the name of General Sir Michael Rose, the former special forces commander, to a letter from former military leaders supporting Britain's continued membership of the EU."
A Number 10 spokesman said: "Given that 60% of BCC members say they want to stay in the EU, No10 was surprised to see the director general of the organisation come out for Brexit.
"We are clear no pressure was put on the BCC to suspend him. Of course No10 talks to business organisations regularly - but, to be clear: no pressure was applied. This decision is entirely a matter for the BCC."
The row over Mr Longworth's position came as Mr Johnson joined with fellow Leave supporter Justice Secretary Michael Gove in an attempt to undermine the Prime Minister's repeated claims that EU membership made the UK "stronger" and "safer".
The Justice Secretary told the Sunday Times: "I think overall our national security is strengthened if we are able to make the decisions that we need and the alliances that we believe in outside the current structures of the of the European Union."
He claimed EU judges had taken decisions against the UK's national interests by dictating "what our spies can do and whether we can be kept safe".
Mr Gove added: "Our security and sovereignty stand together. I believe that there are better opportunities to keep people safe if we are outside the European Union."
Mr Johnson said the EU had taken "decisions that are inimical to our ability to mount serious surveillance operations against terrorists".
He added: "The power to take decisions about deporting people or about counter-terrorist surveillance is being taken away from the UK."