John Longworth resigned on Sunday night as director-general of the British Chambers of Commerce after being drawn into a political row over his support for the UK to leave the European Union.
The surprise decision illustrates the increasingly febrile atmosphere around the impending referendum on EU membership on June 23.
The support of major business figures is seen as critical by both camps given the fundamental economic arguments over Brexit.
The Financial Times revealed on Friday evening that Mr Longworth had been suspended after making several high-profile interventions in favour of leaving the EU.
Critics within the organisation claimed that he had breached the group's self-ordained position of neutrality over the June referendum.
On Sunday, Boris Johnson, London mayor, suggested, without any evidence, that the government might have engineered the suspension. The comments prompted an angry denial by Number 10.
At 10pm the same evening the BCC issued a statement saying that Mr Longworth had resigned and that there had been no political interference.
That prompted angry comments from Eurosceptic politicians, including David Davis, the Tory MP, who labelled the former BCC chief as a "Brexit martyr".
Douglas Carswell, Ukip's only MP, claimed that the decision had been "orchestrated" by Downing Street.
In a press statement from the BCC, Nora Senior, its president, said that Mr Longworth accepted that his comments, despite being made in a personal capacity, would have been "likely to create confusion".
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She insisted that "no politician or interest group" had any influence on the initial decision of the BCC's board to suspend Mr Longworth.
A Number 10 aide said: "No pressure was put on the BCC to suspend John Longworth." Instead, Downing Street had been taken by surprise by the decision, he said.
Adam Marshall, the group's highly regarded head of policy, will act as interim director-general.
The BCC, which represents 90,000 companies around the country, is one of the most high-profile business organisations in Britain.
Mr Johnson said at the weekend that Mr Longworth had become a victim of "project fear", shorthand among Eurosceptics for the In camp's tactics.
Mr Johnson, one of the most senior figures on the Out side, said that the suspension had been "scandalous": Mr Longworth had been "crushed by the agents of project fear".
"This is a man who reached the conclusion, after long reflection and a lifetime's experience of business, that it would be better to vote Leave," Mr Johnson said.
"The British public deserve to have the facts put before them. They deserve a proper debate."
Chris Grayling, leader of the Commons, said that business people should be free to speak out without "recriminations": "I simply cannot believe that he would have been suspended if he had spoken out in favour of being in the EU."
But Ms Senior said in her statement that there were "no external factors" in Mr Longworth's decision to quit. "The only views taken into account were those of the BCC board and the BCC's owners, the UK accredited Chamber Network."
A survey of 2,000 BCC members in February found that members were split 60:30 in favour of remaining in the bloc. As a result, the group chose to remain neutral ahead of voting on June 23.
Mr Longworth repeatedly said on Thursday that he was only speaking in a personal capacity on Europe rather than in his role as director-general.
But the fact that the comments were made in a keynote speech at the organisation's conference, and to broadcast media at the same time, led some members to believe that he had "abused" his position.
Kim Conchie, chief executive of Cornwall Chamber of Commerce, said earlier on Sunday that there was no outside involvement in Mr Longworth's suspension.
"The overwhelming majority of Chamber members here in Cornwall . . . are in favour of remaining in a reformed EU," he said.
"That's why John Longworth was suspended, not due to any outside pressure. This was entirely a matter for the board who take the views of our business members seriously."