Boris Johnson faced embarrassment when a key aide resigned after calling for black critics of the Mayor of London to return to the Caribbean.
James McGrath stood down as a senior political adviser over an ill-judged remark to an internet journalist interviewing him on the Mayor's policies on race.
Mr Johnson said last night he accepted the resignation with regret and insisted his departing Australian-born aide was not racist. But Mr McGrath's departure, just seven weeks after the Tories captured City Hall, is a damaging blow to the new administration.
In the interview, Mr McGrath was questioned about a claim before the Mayoral election that a Johnson victory would provoke an exodus of older black Londoners to the West Indies.
Mr McGrath was quoted as saying in response: "Well, let them go if they don't like it here." After the interview was posted on the-latest.com website, Mr McGrath insisted he did not intend to suggest he agreed with the sentiment.
But hours later Mr Johnson announced his aide's resignation, explaining that his response to a "silly and hostile" question had allowed doubts to be raised about the Mayor's hostility to racism. He said: "James's remark was taken out of context and distorted, but he recognises the need for crystal clarity on a vital issue like this.
"We both agree he could not stay on as my political adviser without providing ammunition for those who wish to deliberately misrepresent our clear and unambiguous opposition to any racist tendencies."
He added: "James is not a racist. I know that. He shares my passionate belief that racism is vile, repulsive and has no place in modern Britain."
Mr McGrath, 34, who has worked for the Tory party for seven years, was appointed director of political strategy at City Hall following Mr Johnson's victory over Ken Livingstone last month.
Francis Maude, the shadow Cabinet Office minister, has praised him as " one of our real big-hitters" and credited him with helping to revive the Tories' fortunes nationally.