New Conservative peer Howard Flight has apologised for attacking Government welfare cuts which he suggested would encourage the poor to have more children.
Mr Flight said he wanted to withdraw the comments minutes after Prime Minister David Cameron said he expected him to say sorry and disagreed with his stance.
"I apologise unreservedly for any offence caused and would like to withdraw the remarks," he said in a statement issued by the party.
Mr Flight told the Evening Standard: "We're going to have a system where the middle classes are discouraged from breeding because it's jolly expensive, but for those on benefit there is every incentive. Well, that's not very sensible."
Mr Cameron announced only last week that Mr Flight - who was sacked as an MP in 2005 for outspoken comments about spending cuts - would be given a seat in the Lords.
Asked if he would now prevent him taking his place in the upper house, the Prime Minister said: "I don't agree with what he said and I am sure that he will want to apologise for what he has said, and I think we can probably leave it at that."
The Westminster return of the right-winger, who was barred from defending his Arundel and South Downs seat at the 2005 election by then leader Michael Howard after being taped suggesting the Tories had secret plans to cut spending, has surprised many observers.
Shadow work and pensions secretary Douglas Alexander said: "These shameful but revealing comments cast serious doubt over David Cameron's judgment in personally appointing Howard Flight to the House of Lords only a few days ago.
"Last week one of the Prime Minister's senior advisers told us we'd never had it so good and now his latest hand-picked peer comes out with these comments."
TUC general secretary Brendan Barber said: "This is exactly the kind of remark that leads to political parties being thought of as nasty, and shows just how shockingly out-of-touch with the lives of ordinary low and middle-income people some supporters of this Government can be."