Known for his wildly inventive designs, John Galliano struts out in an outrageous costume at the end of each runway show. That might not happen at Paris Fashion Week - the house of Dior has suspended Galliano as its creative director after he was accused of hurling an anti-Semitic insult during an alcohol-fueled spat at a Paris bar.

The designer vigorously denied wrongdoing Friday and said the move was totally disproportionate. The suspension comes just a week before Dior's fall-winter 2011-2012 ready-to-wear show on the catwalks of Paris.

Open gallery view In this Jan. 21, 2011 file photo, British fashion designer John Galliano appears at the end of his men's fall-winter 2011/2012 fashion collection presented in Paris. Credit: AP

In a terse statement, Christian Dior SA said the suspension would remain in effect pending an investigation into the altercation Thursday night at La Perle, a trendy eatery in Paris' Marais district.

Paris prosecutors said the British designer was questioned by police and released after a couple accused him of hurling an anti-Semitic slur at them. A police official said the designer also exchanged slaps with the couple.

The prosecutors and police, who spoke on condition of anonymity because the investigation is ongoing, say Galliano's blood alcohol levels were excessive.

Fallout was swift.

Just hours after news of Galliano's brief detention hit French websites, Dior CEO Sidney Toledano announced the suspension, saying: The House of Dior confirms, with the greatest firmness, its policy of zero tolerance for any anti-Semitic or racist comments.

Galliano's lawyer, Stephane Zerbib, said the Gibraltar-born designer was totally surprised by the suspension.

"He never made an anti-Semitic remark in more than 10 years at Dior," Zerbib told The Associated Press in a telephone interview. He was insulted, and he responded to the insults.

Under French law, making anti-Semitic remarks can be punishable by up to six months in prison. Public figures in France have been convicted for anti-Semitic remarks in the past, but are usually given only suspended sentences.

Asked about the allegations, Donatella Versace told Italian reporters before her show in Milan that the Galliano she knows isn't like that.

Racism is horrible and I condemn it, but I don't think Galliano was thinking about it, Versace was quoted as saying by the Italian news agency ANSA. He is a good person, and very serious. He is a great creator who has given a lot and has a lot more to give, but that does not justify any type of racism.

Widely regarded as one of the most brilliant designers of his generation, Galliano has long seemed like something of a sacred cow in an industry where turnover tends to be quick and designer hirings and firings happen in the blink of an eye.

Since his appointment in 1996, Galliano has made an indelible mark on the storied House of Dior. Season after season, he reinterpreted the iconic New Look pieces pioneered by founder Christian Dior, managing to make the designs first fielded after World War II fresh and youthful.

Galliano's unforgettable collections of seasons past have channeled inspirations including ancient Egypt, with models in Nefertiti eye makeup and Tutankhamun beards; Masai tribespeople accessorized with rows of beaded necklaces and crop-brandishing equestrians of the 19th century.

Galliano modernized Dior and made it more youthful than any of his predecessors. At times his clothes have been confounding ... and at times have been so extraordinarily sexy that it made you wonder how the brand continued to dress France's first ladies and high society, said Dana Thomas, a former fashion writer for Newsweek in Paris and author of Deluxe: How Luxury Lost its Luster, an expose of the luxury industry.

The suspension throws Dior's immediate future into question. The label fields its fall-winter 2011-2012 ready-to-wear collection on March 4, in the middle of Paris Fashion Week. Galliano shows his own signature label on March 6.

Always theatrical and sometimes outrageous, Galliano's star-studded runway shows are big-budget blockbusters and among the most-anticipated displays on the Paris calendar.

It was not immediately clear whether the Dior show would - or could - go on without Galliano, but it was hard to imagine the label missing the crucial twice-yearly rendezvous to present its next collection to thousands of fashion editors, journalists and buyers.

Still, rumors have swirled that the Dior management has been angling to terminate Galliano's contract and some fashion insiders suggested this presented a golden opportunity for the label to get rid of the designer.

Asked whether she thought Galliano would brave the current controversy and be back at Dior, Thomas said: No.

Jessica Michault, a fashion critic for the International Herald Tribune, noted that the brand is stronger than one designer, predicting that whatever happens with Galliano, Dior will remain a luxury powerhouse.

The house is a very strong image, very iconic, and was even before John got there. He created a very romantic image for the house, something that makes people dream. But he's not the whole history of Dior, she said.

Galliano attorney Zerbib suggested Dior's quick response was an effort by parent company LVMH Moet Hennessy Louis Vuitton to pay penance for its slow reaction to accusations of racism involving another subsidiary, perfume company Guerlain.

Two anti-racism groups filed legal complaints against Jean-Paul Guerlain over comments he made in a television interview late last year. Guerlain is no longer an employee of the company, but remains a consultant and heir to the perfume-maker.

Galliano would have preferred that LVMH responded to Mr. Guerlain in the same manner, Zerbib said.

Galliano, 50, was born in Gibraltar and grew up in London, where he graduated from St. Martins School of Art in 1984.

He moved his design studio to Paris in the early 1990s. He joined Givenchy in 1995 and came to Dior in late 1996. His first design for the house was worn by Princess Diana.

Under his tenure, Dior has attracted many A-list fans, from Kate Moss, whose wedding dress he designed, to actresses Natalie Portman, Charlize Theron and Marion Cotillard. French first lady Carla Bruni-Sarkozy - a former supermodel and friend of Galliano - is rarely seen in anything but Dior for official functions.

Galliano oversees the design of both Dior's ready-to-wear and its made-to-measure haute couture collections.

In fashion weeks past, the audience inevitably roared with approval as Galliano took to the catwalk for his hallmark post-show strut, his chest puffed out like a proud rooster and sporting a different outlandish costume each season.

In Paris next week, audiences may not get that pleasure.

