Lord Rennard's membership of the Liberal Democrats has been suspended pending a disciplinary investigation over bringing the party into disrepute by failing to apologise over harassment allegations, the party has said.

The Lib Dems' regional parties committee, which oversees disciplinary procedures, said it had taken the decision because the peer had not apologised after the harassment allegations made against him.

It said: "Nick Clegg made clear last week, and again this morning, that it would be inappropriate for Lord Rennard to resume the Liberal Democrat whip unless he apologises. Lord Rennard has refused to do so.

"The regional parties committee, which oversees disciplinary procedures under the English party membership rules, today decided to suspend Lord Rennard's membership of the party pending a disciplinary procedure. As such, he cannot return to the Liberal Democrat group in the House of Lords.

"Lord Rennard will now be investigated for bringing the party into disrepute on the grounds of his failure to apologise as recommended by Alistair Webster QC."

The decision comes as the row between his supporters and critics descended into increasing acrimony.

Prior to the announcement of the peer's suspension, Clegg was being urged to consider peace talks with Rennard as Lord Greaves, a senior peer, said the row was tearing the party apart, while Lady Hussein-Ece said some of the debate had begun to demonise women.

The division between critics and supporters of Rennard appears to have hardened almost a week after an independent inquiry found the peer may have violated the personal space of activists but that there was insufficient evidence to say his behaviour had been sexually inappropriate.

At the heart of the dispute is whether Rennard should apologise for any distress caused to the four female complainants before returning to the Lords. His allies say an apology could open him up to legal action.

Clegg, the women involved and more than 100 activists are demanding the apology as a "minimum".

In a round of broadcast interviews on Monday, Clegg said it was a case of "no apology, no whip". However, before the suspension, friends of the peer had said he was intending to defy Clegg and take up the Lib Dem whip again this week.

At its meeting, the regional parties committee considered more than 50 complaints that the peer's failure to apologise had brought the party into disrepute. A party spokesman declined to reveal who sits on the committee.

Two of the female complainants have said they would not take legal action against Rennard if he said sorry. Sources said this was something the peer might consider if it was worded in the right way.

In comments on Twitter, Alison Smith, one of the complainants, said she would "never use a specific apology as an admission of guilt to be used in a civil action". However, she added that she did not want a politician's apology if it was not sincere.

Divisions within the party were inflamed further on Monday after the MEP Chris Davies appeared to dismiss one of the women's complaints about her leg being touched, through clothing, by Rennard.

"This whole situation has been taken massively out of proportion," he told the BBC. "There are people in the street at the moment, people watching this programme, people think[ing] Chris Rennard was some sort of sexual fiend like Jimmy Savile. I mean, the reality is, if Alex Carlile [Rennard's legal adviser] is correct, that one of the complaints is about a leg being touched through a trouser, through a trouser at a meeting six years ago … And you have to remember just what Chris Rennard has been put through – and his wife."

Davies also argued that the party may owe Rennard an apology, not the other way around.

This prompted fury from Hussein-Ece, a Lib Dem peer and the party's gender spokeswoman.

"I don't know what planet he is on," she told the Huffington Post. "Would he want his wife or daughter, if he has one, to be subjected to any of this? I don't think this language belongs in the 21st century.

"He should reflect on what he said. I think he should apologise. I think it's outrageous that an MEP thinks a bit of leg-touching is OK; it's not OK. What sort of world is he living in? Is this sort of Benny Hill? Women being chased around the desk? He should apologise."

She added: "The Salem witch trials demonised women. That's what that was about. I can see an attempt to demonise women [here]."

Other calls for an apology came from Lynne Featherstone, a Lib Dem minister, and Lorely Burt, a prospective deputy leader of the party. A third of the federal policy committee had also written to party officials saying they opposed Rennard's return to their ranks.

As the infighting continued, Lord Greaves, a senior Lib Dem peer, said the party appeared to be in a "huge crisis".

"It is divided into two camps over what in the grand scale of things is a storm in a teacup. There's a huge chasm in the party and each side is standing behind their own lines chucking grenades at the other, and there's absolutely no dialogue going on.

"People on both sides are in entrenched positions and all this is going to do is to destroy the party."

Sir Menzies Campbell, a former leader of the Lib Dems, told BBC 2's Daily Politics show that the party needed to find a peaceful way through the dispute and engage in a "period of calm reflection".

"It seems to me that it's not beyond the wit of man – or the Liberal Democrats, for that matter – to find a form of words in which Lord Rennard is able to accept a joint statement, to be able to assert the fact that in relation to him there was no finding of proof beyond reasonable doubt, but also to say at the same time, 'If by any chance at the same time and inadvertently I have caused distress, then obviously I regret that very much indeed.'

"It's perfectly rational, in my view, for him to say: 'I had no intention, but if by chance I have caused upset then I regret that very much.'

"And I tell you why I say this: we cannot allow this to go on and on and on."