Toby Young has apologised to Philip Hammond after he said the former chancellor’s suggestion that Boris Johnson was backed by speculators who have bet billions on a no-deal Brexit was antisemitic.

Hammond, following on from similar comments made by Johnson’s sister, Rachel, made no mention of the religion or ethnicity of the speculators supporting the prime minister in his warning in the Times on Saturday that “there is only one outcome that works for them: a crash-out no-deal Brexit that sends the currency tumbling and inflation soaring”.

However, on Twitter Young accused Hammond of propagating a “disgusting antisemitic controversy” that “Boris is being manipulated by a secret cabal of city financiers who stand to profit from economic ruin”.

Young’s comments prompted a furious response from Hammond, one of 21 MPs who lost the Tory whip for backing legislation to stop a no-deal Brexit, who said on Sunday that they were absurd and defamatory. He also said he was considering taking legal action.

Following the threat to sue, Young deleted the tweet shortly before midnight on Sunday, and issued an apology while maintaining that “speculators” is sometimes used as a euphemism for Jewish financiers.

Toby Young (@toadmeister) Apologies Philip. The suggestion that “speculators” are controlling the govt could be construed as an anti-Semitic trope if “speculators” is being used as a euphemism for Jewish financiers, as it sometimes is. But you evidently didn’t mean that and I’ve deleted the tweet.

Hedge fund managers who have backed Johnson include Crispin Odey, a fund manager who has also previously endorsed Vote Leave and Ukip. Over the summer it was reported that his fund had made a £300m bet against British businesses and stood to profit from an economic slump in the UK. However, the fund also backed other British companies. Odey has denied backing a no-deal Brexit as a shorting opportunity.

The Financial Times quoted a senior No 10 official responding to Hammond by saying “certain MPs are sounding like conspiracy theorists rather than former cabinet ministers with this kind of absurd and undignified mudslinging”.

Young is close to the prime minister, having been a columnist at the Spectator when Johnson was its editor. Johnson opened Young’s West London free school in 2011 and defended his ex-colleague when his appointment last year to the executive board of the Office for Students, the newly created higher education regulator, was criticised.

Young’s selection was called into question over his lack of qualifications for the role, exaggerated CV and long track record of offensive remarks. But Johnson, then foreign secretary, described the journalist as “the ideal man for the job” and condemned the “ridiculous outcry” surrounding his appointment.

Young eventually stepped down from the role following criticism by then prime minister, Theresa May, and amid further controversy over his espousal of what he called “progressive eugenics”.