Lord Feldman, the co-chairman of the Conservative party, denies being responsible for comments describing grassroots activists as “swivel-eyed loons”.
Lord Feldman said he was taking legal advice after internet rumours circulated that he had made the remarks.
Reports claimed a senior figure within David Cameron’s inner circle made the comments accusing MPs of being forced to take hardline views on issues such as Europe because of pressure from their local associations.
The ally of the prime minister allegedly said: “There’s really no problem. The MPs just have to do it because the associations tell them to, and the associations are all mad swivel-eyed loons.”
The comments were made at a private dinner by a figure with “strong social connections” to the prime minister, The Times and Daily Telegraph reported.
The other Conservative party co-chair Grant Shapps challenged the papers’ version of events and said “as far as we are aware” the reported remarks were not actually made.
I don’t believe anyone senior would say this type of thing. Grant Shapps
Asked who said the words, Mr Shapps told Channel 4 News: “Unfortunately I can’t reveal the answer to that, simply because I was not there and as far as we are aware it was not even said, but we just don’t know.”
He added: “I don’t believe anyone senior would say this type of thing, it’s not an attitude or a view I have ever heard expressed in No 10, in Central Office, we respect and work with people who work incredibly hard as volunteers, unpaid, for the party.”
Geoffrey Vero, Conservative association chairman in Michael Gove’s Surrey Heath seat, told Channel 4 News if the comments were made the person responsible should be sacked.
“If I had a person like that who was so incredibly rude about your own people, I think he has to be fired,” he said.
Mr Vero said although he and Mr Cameron disagreed on gay marriage they respected each other’s positions.
“Therefore, for one of his aides to be calling us loons I think is very divisive and is throwing petrol on what is a complex issue,” he said.
Mr Cameron has given his backing to Lord Feldman.
A Downing Street spokesman said: “The Prime Minister supports Lord Feldman’s position.”
The spokesman added: “It is categorically untrue that anyone in Downing Street made the comments about the Conservative Party Associations and activists reported in the Times and the Telegraph.”
In a statement Lord Feldman, a friend of Mr Cameron’s from Oxford University, said: “There is speculation on the internet and on Twitter that the senior Conservative Party figure claimed to have made derogatory comments by the Times and the Telegraph is me.
“This is completely untrue. I would like to make it quite clear that I did not nor have ever described our associations in this way or in any similar manner. Nor do these alleged comments represent my view of our activists.
“On the contrary in the last eight years of working for the party, I have found them to be hard working, committed and reasonable people. They are without question the backbone of the party.
“I am very disappointed by the behaviour of the journalists involved, who have allowed rumour and innuendo to take hold by not putting these allegations to me before publication. I am taking legal advice.”