Mark Field has been suspended as a Foreign Office minister after grabbing a female Greenpeace activist at a black-tie City dinner.
Mr Field has said he regrets confronting Janet Barker and marching her away as protesters interrupted a speech by the chancellor.
But he said he had been “genuinely worried” she may have been armed.
Ms Barker told the BBC she would not go to the police, but said the MP “should go to anger management classes”.
Footage of the incident has been widely shared on social media, with several Labour politicians calling for Mr Field to be sacked.
A Downing Street spokeswoman said Prime Minister Theresa May had “seen the footage” and “found it very concerning”.
She added: “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.”
On Thursday evening climate change protesters disrupted the beginning of Chancellor Philip Hammond’s annual Mansion House speech about the state of the UK economy.
Activists – dressed in suits, red dresses and sashes with “climate emergency” written on them – entered the room. Greenpeace said they wanted to deliver a speech on the failure of the current system.
Footage shows Mr Field, Conservative MP for the Cities of London and Westminster, getting up and pushing a woman protester against a column, before leading her out of the room.
He later told ITV News that guests had “understandably felt threatened” and he had “instinctively reacted” when the protester rushed past.
“There was no security present and I was, for a split second, genuinely worried she might have been armed,” Mr Field said.
“As a result I grasped the intruder firmly in order to remove her from the room as swiftly as possible.”
He added: “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.”
But Labour’s shadow women and equalities minister Dawn Butler tweeted: “This is horrific… [Mark Field] must immediately be suspended or sacked.”
Mr Field was defended by some of his colleagues, with Conservative MP Johnny Mercer tweeting: “Honestly? Try being in our shoes in the current environment.
“He panicked, he’s not trained in restraint and arrest, and if you think this is ‘serious violence’ you may need to recalibrate your sensitivities. Calm down, move on, and be thankful this wasn’t worse.”
However, before Mr Field’s suspension, Conservative Party chairman Brandon Lewis said it was “very hard to defend” the footage and pledged an investigation.
Conservative leadership contender Jeremy Hunt, who, as Foreign Secretary, is Mr Field’s boss, said: “Mark has issued a full and unreserved apology. He recognised that what happened was an over-reaction.
“In his interest and in the interest of the lady involved we need a proper independent inquiry and that’s what going to happen.”
Ms Barker travelled from her home in Wales to take part in Thursday’s protest. She told the BBC: “350 people were there and only one person reacted that way.
“It’s more the behaviour of that individual. I want him to reflect on what he did and not do it again. Maybe he should go to anger management classes.”
The City of London Corporation has said it is investigating how security was breached at Mansion House, adding it would be “reviewing arrangements for future events”.