British sports minister Richard Caborn wants Spain coach Luis Aragones to be punished after his latest outburst.
Aragones already faces action from the Spanish Football Federation after a racist comment about Thierry Henry.
But the row has escalated after he called Henry's Arsenal team-mate Jose Antonio Reyes "a gypsy".
"These latest comments confirm my view that there is an urgent need for strong action by the Spanish FA," Caborn told the Sunday Mirror.
"When it comes to racism there should be absolute zero tolerance. Punishing him is a decision that should have been taken some time ago."
Caborn is also unhappy about Fifa's decision to fine the Spanish Federation £45,000 following the racist abuse suffered by several England players during November's friendly and U-21 matches.
"Fifa missed an opportunity to stamp its authority and take some
sort of symbolic action," he added.
The row over Aragones intensified on Friday as he attempted to justify his comment about Henry earlier in the season.
He told Spanish newspaper El Mundo: "Reyes is ethnically a gypsy. I have got a lot of gypsy and black friends.
"All I did was to motivate the gypsy by telling him he was better than the black.
"I consider myself a citizen of the world, I don't care about their skin colour. I feel I have been the victim of a lynching.
"I didn't use the term 'black' with any racist meaning."