The Conservative Party board has rejected a call for an investigation into whether Tory co-chairman Lord Feldman described grassroots activists as "swivel-eyed loons".
Brian Binley MP said he had urged a probe at a meeting this afternoon but it was "pretty overwhelmingly rejected".
The Conservative leadership has rallied around Lord Feldman in the row over Telegraph and Times reports that an ally of the Prime Minister described local party associations as "mad, swivel-eyed loons" who forced MPs to adopt hardline stances.
The peer, who was not named in the newspaper reports, was forced to deny making the comments after intense internet speculation.
Members of the party's board gathered at the Double Tree Hilton this afternoon, but amid a heavy media presence they later relocated to Conservative HQ for their monthly meeting. Tory aides insisted the meeting had always been due to take place at CCHQ.
Leaving the gathering, Tory vice-chairman Mr Binley said: "I did propose, as I said I would, a form of investigation into this matter which was pretty overwhelmingly rejected."
He said the board had been "unanimous in its support for Andrew Feldman".
A senior Tory source said the board discussed the issue for 30 to 40 minutes before voting on whether to hold an investigation. Mr Binley was said to be the only one in favour.
Lord Feldman reiterated that he had denied using the words in an informal after-dinner chat with journalists.
The source said the mood had been "convivial" and members praised the peer's role in stabilising the party's finances.
Mr Binley told reporters that people "accepted" Lord Feldman's word. "I have never said that he did say it," he insisted.
Although his call for an investigation was rejected, "it was felt that there was a need to look at the narrowing of the gap between the party in the country and the leadership", the Northampton South MP said.
"I understand what David Cameron is saying about trying to reach out to more people than the Conservative Party, but he has to realise that he is the caretaker of the Conservative Party and not the proprietor of the Conservative Party."