Coun Paul Lisseter claimed it was a case of "shoot the messenger" after making a statement to a public inquiry into a controversial housing scheme in Pocklington where he raised issues including the council failing to deliver enough new homes.
Gladman Developments won its appeal against East Riding Council's refusal of planning permission for 380 homes off The Balk and another 150 homes at Swanland in March, which the council is now trying to challenge in the High Court.
Opposition councillors claim the latest legal action could cost the taxpayer as much as £200,000, although the ruling Tories say it will be no more than £20,000.
Councillor Lisseter, who runs Williamsfield Developments, appeared before the executive council of the East Yorkshire Constituency Conservative Association in a virtual meeting on Monday night.
He said there was no suggestion of wrongdoing or breaking the rules, and was disappointed by their decision, but would appeal.
He said: "I fully understand the reaction to the recent appeal decisions at Pocklington and Swanland but I maintain that these came about through failure to deliver our local and national policy over a number of years. Trying to pass the blame to me has been characterised as shooting the messenger and I believe that view carries considerable weight."
He said copies were available of his statement to the public inquiry and stood by those comments.
He believes there are more than 8,000 households in the county - a number greater than the population of Pocklington - whose housing needs are not currently being met.
In a statement EYCCA said Coun Lisseter had been expelled by its executive council, following a complaint and suspension by the association's management.
It added that any appeal would be heard by the party's disciplinary committee at Conservative Campaign Headquarters, formerly Conservative Central Office, following party guidelines.
It said there was no involvement by the Conservative Group at County Hall and was entirely an internal party matter.
It added: "Conservative councillors are there to support residents, and whilst not prevented from working for their own interests any actions should not be damaging to the local party or detrimental to local people."
Subject to an appeal decision, Councillor Lisseter could apply to rejoin the party after 12 months.
The councillor will continue to carry out ward duties but will not be on scrutiny committees he was previously member of.