Ben Emmerson QC has been taken off-duty after the Independent Inquiry into Child Sexual Abuse (IICSA) had "recently become very concerned" about aspects of his leadership, a spokesperson for the probe said.
Lawyers acting for the inquiry's counsel said last night: "Mr Emmerson has read this evening on the internet that he has been suspended from the [IICSA]. If, and when, allegations are put to him, he will respond appropriately."
The suspension of Mr Emmerson has been seen as another dent to the credibility of the IICSA, which was established by the then-home secretary Theresa May in 2014.
Despite being beset with difficulties, including the resignations of three consecutive leaders, a Home Office spokesperson said home secretary Amber Rudd (pictured above) still has full confidence in the £100 million inquiry.
A spokesperson for Ms Rudd said: "Ben Emmerson's suspension is a matter for the independent inquiry, which is continuing its vital work in exposing the failure of public bodies and other organisations to prevent systematic child sexual abuse.
"Our commitment to this inquiry is undiminished. We owe it to victims and survivors to confront the appalling reality of how children were let down by the very people who were charged to protect them and to learn from the mistakes of the past."
Professor Alexis Jay OBE (pictured above) became the fourth leader of the probe last month, after New Zealand judge Dame Lowell Goddard (pictured below) cited a "legacy of failure" among her reasons for resigning.
Campaigner and abuse survivor, Ian McFadyen, told the BBC Radio 4 Today programme he was "more than upset" to learn of Mr Emmeron's suspension.
He said: "I've been involved in this inquiry for the last two-and-a-half years, trying to make sure it is fit for survivors' purposes to engage with, and have met Mr Emmerson several times and he is someone who I hold in high regard and who I think is trustworthy..."
Conservative MP James Berry, who sits on the Home Affairs Select Committee, dismissed calls for the IICSA to be broken into more manageable sections.
He told the Today programme: "There are already 13 separate investigations, there are 13 sub-inquiries within this inquiry, and if they were all entirely independent public inquiries you'd lose that overall scrutiny and then the value and the consistency of the recommendations that came out at the end would lose their force."
Lord Macdonald, former director of public prosecutions, described the suspension of Mr Emmerson as a "categorical disaster", adding the inquiry had been "careering out of control since its inception".
An IICSA spokesperson added: "Suggestions in the press that Mr Emmerson was considering resigning after raising disagreements over the future direction of the inquiry are untrue.
"They are not a matter on which he has advised the chair of the inquiry or the panel."
Phil Johnson, from Minister and Clergy Sexual Abuse Survivors, told Premier's News Hour that the inquiry is in "chaos."
He said: "It does look very shambolic from the outside, people could rightly presume the inquiry is in total chaos.
"Ben [Emerson] is a very eminent, experienced, top QC and I think it's very important that we have that level of expertise within the inquiry."
He went on: "The current chair, Alexis Jay, she doesn't have the legal experience of a judge or a top QC."
He told Premier survivors of abuse have been fighting for a voice and justice for years, and are losing hope in the inquiry.
"I don't have an awful lot of faith.
"I think there needs to be a pause for thought... not necessarily reconsider the entire scope of the inquiry, but I think there is a good sound argument for maybe breaking it up into its individual investigations."
Listen to Premier's Aaron James speak to Phil Johnson here: