Downing Street was locked in a war of words with at least three national newspapers on Saturday over claims that one of the prime minister's closest allies branded rank-and-file Conservative party members "swivel-eyed loons".
Andrew Feldman, the party's co-chairman, issued a statement denying that he made the claims, and saying he was consulting lawyers, after he was identified as the source of the comments by Tory bloggers.
It is claimed that the comments were made during a private dinner of the Conservative Friends of Pakistan at the Intercontinetal Hotel in Westminsteron Wednesday 15 May.
Political correspondents from the Daily Telegraph, Times and Daily Mirror were present.
But the Daily Telegraph's James Kirkup said he stood behind his claims. "I have seen Lord Feldman's statement," said Kirkup. "I stand by my story."
The journalists from all three titles agree that a senior Conservative, described as "socially close" to Cameron, made the remarks in response to a question about backbench Conservative support for a private members bill that criticised the Queen's Speech over its lack of an EU referendum.
According to the newspapers, the Conservative said: "It's fine. There's really no problem. The MPs just have to do it because the associations tell them to, and the associations are all mad, swivel-eyed loons."
The source of the remarks is likely to face immediate calls for his resignation, should his identity be confirmed.
Conservative blogger Guido Fawkes wrote on Twitter: "Andrew Feldman is chairman of the Conservative Party and a close friend of Cameron."
"Have emailed Lord Feldman, imagine he'll want to condemn this insult to his hard working party members ASAP."
In response to the flurry of rumours, Feldman said in a statement: "There is speculation on the internet and on Twitter that the senior Conservative party figure claimed to have made derogatory comments by the Times and the Telegraph is me.
"This is completely untrue. I would like to make it quite clear that I did not nor have ever described our associations in this way or in any similar manner. Nor do these alleged comments represent my view of our activists.
"On the contrary in the last eight years of working for the party, I have found them to be hard working, committed and reasonable people. They are without question the backbone of the party.
"I am very disappointed by the behaviour of the journalists involved, who have allowed rumour and innuendo to take hold by not putting these allegations to me before publication. I am taking legal advice."
Downing Street also issed a denial. A spokesman said: "The prime minister supports Lord Feldman's position. It is categorically untrue that anyone in Downing Street made the comments about the Conservative party associations and activists reported in the Times and the Telegraph."
Feldman is described as one of Cameron's oldest political friends, and a member of his inner circle. He previously worked on Cameron's campaign for the Tory leadership, having been a friend of the prime minister since university days, when the two played in the tennis team of Brasenose College, Oxford.
He was appointed Conservative party chief executive in 2008, and co-chairman, with Baroness Warsi, in 2010, and had been expected to play a significant role in the party's preparations for the general election.
Grant Shapps, the co-chairman of the Conservative party, defended Feldman. "He works very closely with the party volunteers," he told the BBC. "I believe him when he says that he did not say that about our fantastic volunteers," he told the BBC, "We have seen these rumours flying around the internet, we have seen it with Lord McAlpine and Andrew Mitchell, both of whom were later in the clear."
Cameron has previously referred to Ukip supporters as "a bunch of fruitcakes, loonioes and closet racists", while in an interview with Feldman in the Financial Times, Cameron was said to refer to "anyone who wants to talk to him about the EU [as] 'swivel-eyed'".
The revelations stirred deep anger in Tory grassroots circles, and on social media sites. Conservative MPs Nadine Dorries, Tracey Crouch and Tim Loughton all posted angry reactions to the story on Twitter.
Dorries wrote: "If MP called activists swivel-eyed loons they would be all over the media. Why don't we know the name of no 10 aide?"
Crouch said: "My activists are far from being swivel-eyed loons, they are hard-working people who care passionately about local area and future of the country.
"I wonder if this 'aide' has ever been a member of an association, delivered a single leaflet, packed an envelope or knocked on a door?"
Former Tory party treasurer Lord Ashcroft posted: "Strategy emerging. Ukip fruitcakes and clowns. Activists mad swivel-eyed loons and oh some voters f--king muslims. Not sure it will work!"
The story threatened to grow on Saturday evening, with Conservative grassroots members saying they felt deeply offended.
Bob Woollard, chair of the umbrella group Conservative Grassroots, called for a "full-scale inquiry".
"The prime minister should disassociate himself from these comments. If those rumours are true, the person should be sacked," he said.
Cameron had surrounded himself with a "metropolitan elite" while grassroots members had been subject to "all sorts of derogatory comments", said Woollard, who admitted he had "a lot of sympathy" with Ukip leader Nigel Farage, who has attracted similar criticism.
Farage seized on the remarks, which come in the wake of Ken Clarke's broadside labelling supporters "clowns, waifs and strays". Cameron has himself derided Ukip as a party of "fruticakes and closet racists".
Farage tweeted :"If you are a Conservative supporter who believes in Ukip ideas then your party hates you. Come and join us."
He added: "This person is an excellent recruiting sergeant for Ukip. If constituency chairman or district chairmen of the local Conservative associations feel uncomfortable, now is a good time to leave the party. There will be a warm pint of bitter awaiting those who come over."
Conservative supoporters will await tomorrow's front pages nervously.
Daily Telegraph editor Tony Gallagher wrote: "By the way, the identity of the person behind 'swivel-eyed loon' jibe is shocking".
In response the Conservative commentator Iain Martin repled: "I know who it is. The person close to Cam will have to resign."
Another Conservative blogger, Iain Dale, wrote: "Quite a few people on Twitter are naming one particular Cameron groupie as the culprit on the basis that he is in the 'PM's social circle' and 'close to the party machine'.
"However, we all know there are quite a few other people who also fit those criteria. So if it isn't him he is being unfairly traduced. One thing we can be sure is this. Whoever it is will be sh**ting bricks this morning that they will be named in the Sunday papers. And so they should be."