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A Tory MP has been caught up in a racism storm after she described leaving the EU without a deal as the “real n***** in the woodpile”.

Anne Marie Morris, MP for Newton Abbot, made the controversial remark at a meeting of eurosceptics at the East India Club in St James Square, central London, on Monday.

The 60-year-old, who studied at Oxford University, claimed just 7 per cent of financial services in the UK would be affected by Brexit.

In a recording published by the Huffington Post, she then said: “Now I’m sure there will be many people who’ll challenge that, but my response and my request is look at the detail, it isn’t all doom and gloom.

“Now we get to the real n***** in the woodpile which is in two years what happens if there is no deal?”

She has since apologised for the comment, describing it as "unintentional".

Green Party co-leader Caroline Lucas urged the Tories to cut ties with Ms Morris, tweeting: "Appalling. Should have the whip removed immediately.

"No place in our politics for racism, full stop."

Outgoing Liberal Democrat leader Tim Farron backed calls to remove the whip from Ms Morris.

"This disgusting comment belongs in the era of the Jim Crow laws and has no place in our Parliament," he said.

"The Conservative Party should withdraw the whip from Anne Marie Morris and they should do it today.

"Every hour they leave her in place, is a stain on them and the so called 'compassionate conservatism' they supposedly espouse.

"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."

Labour MP for Streatham Chuka Umunna added: "Speechless, not just at the remark being made but also at the reported lack of a reaction from the Tories there. Utterly appalling."

Labour's national campaign co-ordinator Andrew Gwynne said: "Anne Marie Morris' comments are 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.

"Theresa May once spoke about changing the Tories' 'nasty party' tag.

"If she's serious about that, she will admit it's not enough for the Tories to 'investigate' and will apologise and act immediately. If that means withdrawing the whip, that's what they should do."

Ms Morris told the Standard: "The comment was unintentional. I apologise unreservedly for any offence caused."

Ms Morris was later supsended by Theresa May, who described the remark as "completely unacceptable".