Tory MP Mark Field has been suspended as a minister while investigations take place into the Mansion House incident, Downing Street said.
Mr Field came under fire after footage showed him physically removing a climate change protester from a dinner event.
The video clip shows the Foreign Office minister stopping a female protester by pushing her against a column before holding her at the back of the neck and forcefully walking her out of the room at Mansion House in central London.
It came as activists interrupted a black-tie event where chancellor Philip Hammond was giving a speech.
A Downing Street spokeswoman said: "The Prime Minister has seen the footage and she found it very concerning.
"The police have said they are looking into reports over this matter and Mark Field has also referred himself to both the Cabinet Office and the Conservative Party.
"He will be suspended as a minister while investigations take place."
Mr Field has said he has referred himself to the Cabinet Office for investigation and has apologised "unreservedly" to the protester.
In a statement, he said: "In the confusion many guests understandably felt threatened and when one protester rushed past me towards the top table I instinctively reacted.
"There was no security present and I was for a split-second genuinely worried she might have been armed.
"As a result I grasped the intruder firmly in order to remove her from the room as swiftly as possible."
Greenpeace activist Janet Barker said she had expected some resistance to the group's protest but not to be "grabbed round the neck" and physically removed from the room.
She said: "I expected to maybe engage in a conversation or two with people, perhaps people blocking my way.
"But certainly not to be grabbed round the neck."
There have since been calls for Mr Field to be sacked as a minister over his actions.
Labour MP Dawn Butler said it was "horrific" and accused the Conservative MP of "violence against women".
Fellow Labour MP Jess Phillips suggested that the protesters could have been handled “without physical contact”.
However, Conservative MP Michael Fallon called for an investigation into security at the venue, not of Mr Field.
He told talkRADIO’s Julia Hartley-Brewer: “There has been an appalling breach of security to allow the protesters to get into an event that contained so many key people. I think we need an investigation into how that happened.
“As far as Mark Field is concerned, I have not seen the video but I am sure it will be looked at.
“We should work out why there were not enough security people around to get them out before we leap to condemn the one MP who did get up and do something about it.”
Greenpeace has since accused the Conservative MP of “assaulting” the protester.
Greenpeace has said 40 of its activists, some of whom wore red evening dresses with sashes that read "climate emergency", had interrupted the event, which was being broadcast live on television.
The campaign group said the activists had wanted to deliver a speech on how the current system has failed.
Mr Field previously called on the Metropolitan Police to take "a much firmer grip" during the Extinction Rebellion climate emergency protests in April.
The minister said the law should be applied "to its full extent against those who insist on protesting in this anti-social way".
A City of London Police spokesman said: "We were alerted at 9.03pm. We were called by security at Mansion House who let us know there were a group of protesters who had gained entry and were refusing to leave.
"Officers arrived to help with their ejection. Once in the presence of the police, the protesters were co-operative and left the premises.
"No arrests were made."