A Brexit-backing Conservative MP who described the prospect of leaving the European Union with no deal as "the real n***** in the woodpile" has been suspended from the parliamentary party.
Prime Minister Theresa May said the comment by Anne Marie Morris was "completely unacceptable" and she was having the whip withdrawn.
"I was shocked to hear of these remarks, which are completely unacceptable. I immediately asked the chief whip to suspend the party whip," Mrs May said.
"Language like this has absolutely no place in politics or in today's society."
Ms Morris caused a storm of protest after her comments - at a meeting of Eurosceptics at the East India Club in St James Square in central London, organised by the Politeia group - came to light.
The MP for Newton Abbot said her comment was "entirely unintentional", adding: "I apologise unreservedly for any offence caused."
In an audio clip obtained by the Huffington Post, she is heard saying: "And then we get to the real n***** in the woodpile which is in two years what happens if there is no deal?"
According to the website she made the remark while discussing what financial services deal Britain could strike with the EU after Brexit.
Labour's national campaign co-ordinator Andrew Gwynne said Ms Morris's comments were "outrageous and totally unacceptable".
"While the Conservative Party has tabled a debate on Wednesday to apparently discuss and condemn abuse of candidates in the General Election, these comments prove their hypocrisy," he said
Outgoing Liberal Democrat leader Tim Farron said: "This disgusting comment belongs in the era of the Jim Crow laws and has no place in our Parliament.
"I am utterly shocked that this person represents the good people of Newton Abbot.
"Even if she misspoke this is the nastiest thing I've heard an MP utter since Lord Dixon Smith uttered the same awful phrase a few years ago."
Green Party co-leader Caroline Lucas tweeted: "Appalling," adding: "No place in our politics for racism, full stop."
The incident is a further blow for Mrs May, reducing her official tally of Conservative MPs in the Commons by one.
The Prime Minister is already reliant on a deal with Northern Ireland's Democratic Unionists to prop up her Government after seeing her majority wiped out in last month's General Election.