Tory leader Michael Howard has expelled an MP from the parliamentary party for failing to apologise for a joke about the deaths of 20 Chinese cocklers.
Ann Winterton has refused to apologise for her cockler joke
Ann Winterton, 63, the MP for Congleton in Cheshire, had the party whip withdrawn over remarks made during an after-dinner speech.
Mr Howard called them and her refusal to say sorry "completely unacceptable".
Twenty migrants died after being caught by a rising tide at Morecambe Bay in Lancashire earlier this month.
Two years ago Mrs Winterton was sacked as shadow cabinet spokeswoman for agriculture for making a racist joke at a rugby club dinner.
The latest incident involved comments - about sharks and a take-away - she made at a Whitehall dinner to improve Anglo-Danish relations, attended by MPs and industry figures.
Mrs Winterton issued a statement on Thursday saying she did not intend to comment on "recent events other than to say it has never been my practice to discuss publicly conversations which took place at a private dinner party at a private flat".
"The decision by my party's leadership will not impact on my ability or determination to represent my constituents."
But Labour MP Nick Palmer, who was at the dinner, told BBC Radio 4's Today: "People were a bit stunned really. It was a very low-key friendly dinner. I was very sorry for the host - it was just a group of people discussing Danish issues.
"Most people make a bad joke now and then, but to make a joke about people who have just died in particularly horrible circumstances - the contrast between standing on the beach in the dark being drowned and sitting round a comfortable table making jokes about them is just, just horrible."
Mr Howard said in a statement: "Ann Winterton's remarks about the tragic deaths in Morecambe Bay were completely unacceptable.
"Such sentiments have no place in the Conservative Party.
"I deplore them and I apologise for them on behalf of my party."
Last week he used a speech in Burnley, the scene of race riots in 2001, to denounce the British National Party which has seven council seats in the town.
The speed of Mr Howard's decision to withdraw the whip reflects the determination of the Tory leader that the party should not be affected by any taint of racism.
Withdrawing the whip means that Mrs Winterton remains an MP, but is not now part of the Conservative Party grouping at the House of Commons.
She can not be an official Conservative Party candidate at the next election while the whip is withdrawn. To get it back the party has said she must apologise for her joke.
Dr Peter Kolker, chairman of Congleton Conservative Constituency Association, described the MPs remarks as "unremarkably unfunny" and added "I think what she said was just stupid".
He added: "I have a good sense of humour so long as it is reasonably clean and this was not funny at all.I think it was an error."
Speaking at his home in Goostrey, Cheshire, Dr Kolker refused to be drawn on whether there would be moves to deselect Mrs Winterton and said that would be a matter for the association to decide.
He said the MP was very popular in the constituency and any decision about her future could not be as a result of a knee-jerk reaction.
Lord Taylor of Warwick, a Tory peer who suffered racism from party members when a prospective Tory MP in Cheltenham in 1992, said he was shocked by Mrs Winterton's comments.
He said: "She simply does not learn from past mistakes. This is the second time she has made a racist, insensitive and totally unfunny remark.
"She's a well-educated woman, but with no common sense. I do not think she is fit to be a member of parliament."