A Conservative welfare minster has apologised after suggesting that disabled people are "not worth" the national minimum wage and some could only be paid "£2 an hour".

Lord Freud, the Welfare Reform minister admitted the comments were "offensive” after they were disclosed by Ed Miliband during Prime Minister's Questions this afternoon. The Labour leader has called on the Tory peer to resign.

Listen to the recording below

In the recording, made during a fringe meeting at the Conservative conference two weeks ago, the peer said that some disabled people could be paid £2 an hour, rather than the full rate of £6.50, if they wanted to work.

Responding to a question from a councillor, he said: “You make a really good point about the disabled. Now I had not thought through, and we have not got a system for, you know, kind of going below the minimum wage.”

Listen to Lord Freud's comments about disabled people

Lord Freud added: “There is a small… there is a group, and I know exactly who you mean, where actually as you say they’re not worth the full wage, and actually I’m going to go and think about that particular issue, whether there is something we can do nationally, and without distorting the whole thing, which actually if someone wants to work for £2 an hour, and it’s working can we actually...”

Mr Miliband read out the comments and challenged the Prime Minister: “Is that your view?”

Mr Cameron replied: “No, absolutely not. Of course disabled people should be paid the minimum wage and the minimum wage under this Government is going up and going up in real terms.

"It’s now at £6.50. We will be presenting our evidence to the Low Pay Commission, calling for another real-terms increase in the minimum wage."

Mr Miliband replied: "To be clear about what the Welfare Reform Minister said, it’s very serious. He didn’t just say disabled people weren't worth the minimum wage, he went further and he said he was looking at whether there is something we can do, if someone wants to work for £2 an hour.

"Surely someone holding those views can't possibly stay in your Government?"

Mr Cameron responded: "Those are not the views of the Government. They are not the views of anyone in the Government."

Issuing a statement this afternoon, Lord Freud said: "I would like to offer a full and unreserved apology. I was foolish to accept the premise of the question. To be clear, all disabled people should be paid at least the minimum wage, without exception, and I accept that it is offensive to suggest anything else.

"I care passionately about disabled people. I am proud to have played a full part in a government that is fully committed to helping disabled people overcome the many barriers they face in finding employment. That is why through Universal Credit - which I referred to in my response - we have increased overall spending on disabled households by £250 million, offered the most generous work allowance ever, and increased the disability addition to £360 per month.

"I am profoundly sorry for any offence I have caused to any disabled people."

Though he has apologised, the rebuke from the Prime Minister leaves the Conservative peer, a close ally of the Work and Pensions Secretary, Iain Duncan Smith, struggling to survive in his Government post.

Clare Pelham, chief executive of Leonard Cheshire Disability said: "Suggesting that some people should be paid at below the minimum wage – the level that society has decided is the very minimum that anyone should expect – is deeply saddening and ill-informed.

"Disabled people make an immense contribution to society and to the workplace. The role of the Government should be to champion all people seeking work and their right to a fair salary.”

In a statement, Lord Freud later said: “I would like to offer a full and unreserved apology. I was foolish to accept the premise of the question. To be clear, all disabled people should be paid at least the minimum wage, without exception, and I accept that it is offensive to suggest anything else.