Boris Johnson is facing calls for his sacking after saying a Libyan city could become the next Dubai once it had cleared "the dead bodies away".
The Foreign Secretary has faced a backlash from within his own party and from Labour over his comments, with MP Heidi Allen saying he should be sacked, a sentiment echoed by the Liberal Democrats.
Mr Johnson's comments at a Conservative Party conference fringe event were denounced as "callous" and "100% unacceptable" by Labour.
The 53-year-old made his remarks after he was asked about his recent visit to Libya.
In response to the question, Mr Johnson told Tory activists that investors want to transform the coastal city of Sirte, where dictator Muammar Gaddafi was killed during the 2011 civil war, into a new version of the emirate.
In December 2016, Libyan forces finished clearing the last of so-called Islamic State from their former stronghold of Sirte following a near seven-month battle which saw 700 security forces killed and more than 3,200 wounded.
The Foreign Secretary said: "I look at Libya, it's an incredible country.
"Bone white sands, beautiful sea, Caesar's Palace, obviously, you know, the real one.
"Incredible place. It's got a real potential and brilliant young people who want to do all sorts of tech.
"There's a group of UK business people, actually, some wonderful guys who want to invest in Sirte on the coast, near where Gaddafi was captured and executed as some of you may have seen.
"They have got a brilliant vision to turn Sirte into the next Dubai.
"The only thing they have got to do is clear the dead bodies away," he said before laughing.
The host of the event then quickly stepped in.
As Mr Johnson continued to speak, Baroness Stroud, a former special adviser to ex-Cabinet minister Iain Duncan Smith, said: "Next question."
The Legatum Institute chief executive officer added: "The dead bodies was the move on moment."
In response to Mr Johnson's comments, Conservative MP Heidi Allen tweeted: "100% unacceptable from anyone, let alone the Foreign Secretary. Boris must be sacked for this. He does not represent my party."
Conservative MP Sarah Wollaston also attacked the former mayor of London's comments, tweeting that the "demeaning joke... would be crass even from a stand up".
While shadow foreign secretary Emily Thornberry denounced her counterpart's comments as "unbelievably crass, callous and cruel".
Ms Thornberry continued: "It is less than a year since Sirte was finally captured from Daesh by the Libyan Government of National Accord, a battle in which hundreds of government soldiers were killed and thousands of civilians were caught in the crossfire, the second time in five years that the city had seen massive loss of life as a result of the Libyan civil war.
"For Boris Johnson to treat those deaths as a joke - a mere inconvenience before UK business people can turn the city into a beach resort - is unbelievably crass, callous and cruel.
"If these words came from the business people themselves, it would be considered offensive enough, but for them to come from the Foreign Secretary is simply a disgrace.
"There comes a time when the buffoonery needs to stop, because if Boris Johnson thinks the bodies of those brave government soldiers and innocent civilians killed in Sirte are a suitable subject for throwaway humour, he does not belong in the office of Foreign Secretary."
Lib Dem deputy leader Jo Swinson said the "unbelievably crass and insensitive comment" was further proof Mr Johnson was "not up" a job for which diplomacy was "a basic requirement".
She added: "May needs to get her house in order and sack him."
Mr Johnson defended his comments, saying: "Shame people with no knowledge or understanding of Libya want to play politics with the appallingly dangerous reality in Sirte.
"The reality there is that the clearing of corpses of Daesh fighters has been made much more difficult by IEDs (improvised explosive devices) and booby traps.
"That's why Britain is playing a key role in reconstruction and why I have visited Libya twice this year in support."