Conservative MP Julian Lewis has been kicked out of the Conservative parliamentary party after beating Chris Grayling to become chair of the Intelligence and Security Committee.
Believed to be No 10's preferred choice, Mr Grayling was widely expected to get the role.
But concerns had been raised that the body's impartiality could be undermined, and MPs backed Mr Lewis.
The committee scrutinises the work of the intelligence and security services.
A senior government source told the BBC that Mr Lewis "has been told by the chief whip that it is because he worked with Labour and other opposition MPs for his own advantage".
Labour's shadow foreign secretary Lisa Nandy criticised the decision tweeting: "Completely self-defeating act that bears the hallmark of a government so arrogant it really believes it is above scrutiny.
https://www.bbc.co.uk/news/uk-politics-53422010