Claims Downing Street put pressure on the British Chambers of Commerce to suspend its director general for Brexit comments are for “conspiracy theorists”, Michael Fallon told Sky News.
The Defence Secretary denied that Number 10 nobbled the BCC after John Longworth make comments in support of Britain leaving the EU in an interview with Sky last week.
His comments come as Mr Longworth resigned leaving him free to campaign for the UK to leave the EU.
Explaining his decision to stand down, he told Sky News: “I would like to be free to be able to express my own views on the EU referendum debate.”
Mr Longworth was suspended for speaking out in support of Brexit because it did not reflect the group’s view – the majority are in favour of remaining in the EU.
The business group has denied being influenced by politicians or interest groups, but UKIP MP Douglas Carswell tweeted: “Well done Downing Street. You got your man.
“This is what Project Fear looks like. Nasty people in Number 10.”
Mr Fallon said: “The board of the BCC have made it very clear that this was their decision and there was no external pressure from anybody else.
“You get, I think, people who want to leave Europe, to vote no in the referendum, are seeing conspiracy theories everywhere now because they don’t want to answer the basic question, which is if you leave Europe where are you going?
“They have to start answering these questions instead of coming up with rather bizarre conspiracy theories that here the British Chambers of Commerce have flatly denied.”
A BCC spokesman said Mr Longworth has accepted his sympathy for the Out campaign was “likely to create confusion” over the group’s official stance.
His comments had been at odds with the majority of BCC members, who are in favour of staying in the EU, according to the organisation’s own research.
Nora Senior, president of the BCC, said: “John Longworth and the BCC Board recognise that John’s personal view on the referendum is likely to create confusion regarding the BCC’s neutral stance going forward.”
The former boss of the Confederation of British Industry, Sir Richard Lambert, criticised Mr Longworth’s decision to speak out saying it was the job of directors of trade associations to represent the views of their members.
He said: “A recent survey of BCC members found that three-fifths of them wanted to stay in the EU, yet Longworth spoke a week ago in favour of leaving. He was, he said, only speaking in a personal capacity – but that is not his job.”
Sir Richard said it was not surprise that Mr Longworth had been suspended.
Earlier, Boris Johnson had described the BCC’s decision to suspend Mr Longworth as “absolutely scandalous”.
The London mayor, a prominent supporter of the Out campaign, had said: “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.”
Adam Marshall has been named as acting director general of the BCC until a permanent replacement is appointed.