Mark Field has been suspended as a junior foreign minister pending an investigation after he grabbed a female demonstrator by the neck and pushed her.
Several women on Thursday evening prevented Philip Hammond from speaking for a few minutes by using loudspeakers to shout slogans during an annual banquet in London's Mansion House building.
"The prime minister has seen the footage and she found it very concerning," said a spokeswoman for Prime Minister Theresa May on Friday.
Field had referred himself for a government investigation after grabbing the climate-change protester who had interrupted a speech by Britain's finance minister.
In footage posted online by broadcaster ITV, Field grapples with a woman and then holds her by the back of her neck as he marches her out of a room.
"I deeply regret this episode and unreservedly apologise to the lady concerned for grabbing her but in the current climate I felt the need to act decisively to close down the threat to the safety of those present," Field said in a statement to ITV.
"In view of the publicity around this incident I am referring myself to the Cabinet Office to examine whether there has been a breach of the ministerial code, and will of course cooperate fully with their investigation," he said.
Field's office did not immediately respond to a request for comment from Reuters.
The main opposition Labour Party's spokeswoman for women and equalities Dawn Butler said Field should be immediately suspended or sacked. "This is horrific," she wrote on Twitter.
