Resigned Downing Street aide Damian McBride committed a serious breach of the special advisers' code of conduct, Whitehall's top civil servant said today.
Cabinet Secretary Sir Gus O'Donnell wrote to the Tories saying the actions of Gordon Brown's former head of strategy and planning fell "far short" of the public's expectations.
He warned that any repeat of the behaviour by special advisers would result in automatic dismissal.
Mr McBride, a longstanding adviser to the Prime Minister, resigned at the weekend after it emerged he had written emails making unfounded personal allegations about senior Tories.
Responding to a letter from Conservative Party chairman Francis Maude, Sir Gus wrote today: "What happened constituted a clear and serious breach of the Code of Conduct for Special Advisers.
"It cannot and has not been tolerated."
The Cabinet Secretary confirmed that Mr McBride had not received severance pay, adding: "As the PM has made clear, the events reported over the past weekend were not acceptable, and fell far short of the high standards the public has a right to expect."
Sir Gus said he had written to all permanent secretaries - the chief civil servant in each department - to inform them of an update to the code of conduct.
"In particular, under this strengthened guidance, it has been made specifically clear that special advisers will automatically be dismissed if they are ever found to be preparing and disseminating inappropriate material," he said.
Special advisers are to be required to sign an undertaking that they are aware of the new guidance.
Mr Maude asked Sir Gus to investigate whether Cabinet Office Minister Tom Watson was aware of the website plans. Sir Gus wrote back: "Tom Watson has made his own position clear."
Mr Watson issued a statement through lawyers yesterday insisting he had "no involvement in or knowledge of" the proposals to set up an attack website called Red Rag.
Carter-Ruck solicitors said complaints had been lodged with two newspapers over stories containing allegations that he was involved with the offending emails.
The Prime Minister is facing criticism from within the Labour ranks over the emails affair.
Senior Labour MPs said the scandal exposed an unhealthy culture of hostile briefings - often against them - and a serious need for the Government to focus on policy.
Former minister Frank Field said it showed two sides to Mr Brown's character - including one which is about controlling people - adding: "Mr McBride thought he was doing his master's bidding. He wouldn't have done it otherwise."
Tory leader David Cameron said yesterday that Mr Brown bore responsibility for creating a culture that allowed a senior aide to consider smearing top Conservatives.
He said only a change in government would bring an end to such "nonsense".
Tory backbencher Nadine Dorries, who was among those targeted by Mr McBride, stepped up calls for Mr Brown to make a full apology.
Ms Dorries, MP for Mid Bedfordshire, hit out at both the tone and the content of a letter sent to her by Mr Brown which expressed regret, but stopped short of him saying sorry.
It was sent after Mr McBride quit after admitting he wrote "juvenile and inappropriate" emails from his Downing Street account to former spin doctor Derek Draper.
Mr Draper revealed today he was considering stepping down from running LabourList, a Labour-supporting website.
He also told the Guardian that he "deeply regretted" his part in the smear emails.
"I should not have responded to Damian's email as I did. I should have said sorry, that is wrong, I will have nothing to do with it," he said.
Schools Secretary Ed Balls said he thought the emails were "vile, despicable and horrible" but suggested all parties needed to "raise standards".
"There's no place in politics for that kind of stuff, I think it's awful," he told the BBC Radio 4 Today programme.
"I also think it was awful that those emails were published.
"I don't know how they came into the public domain but the fact they were published and smeared across the newspapers is also awful - but Damian's behaviour was unacceptable."
Mr Balls added: "I think all of us in politics, in the Labour party and all political parties, need to look in ourselves ... and the people we employ, the activities they're undertaking, the things they are doing.
"We all need to work to raise standards and stamp this out."
He added: "All leaders have got responsibility to look at the people they employ and the tactics that they employ."
Mr Balls said he worked with Mr McBride when he was a Treasury special adviser and said he was "generally thought to have done a good job".
But in this case, a "terrible misdemeanour" had taken place, he said.
The Prime Minister was "furious and appalled" by the emails.
"What he wants to do is get back to the big issues which matter to people around the country."
Mr Balls said he and his MP wife, Chief Secretary to the Treasury Yvette Cooper, had been "smeared" in the past by the Guido Fawkes website.
He said: "If you look at the kind of comments made by people on those websites - it's homophobic, it's misogynist, it's deeply sexual and awful and I would never want my children to see the things that have been written about us."