It comes after chief executive Peter Hebblethwaite admitted the company broke employment law when it sacked almost 800 workers without notice.
The Transport Secretary told Sky News this morning: “I thought what the boss of P&O said yesterday about knowingly breaking the law was brazen and breathtaking, and showed incredible arrogance.
“I cannot believe that he can stay in that role having admitted to deliberately go out and use a loophole – well, break the law, but also use a loophole.”
Pressed on whether that meant he was calling for Mr Hebblethwaite to resign “right now”, he said: “Yes.”
Mr Shapps also said the Government is planning to change the law to ensure companies working from British ports pay people the minimum wage.
Yesterday, Mr Hebblethwaite was urged by MPs to quit after acknowledging there is “absolutely no doubt” the ferry operator was required to consult with trade unions.
The company replaced its crews with cheaper agency workers last week.
Staff on the Pride of Hull ship, which sails from Yorkshire to Rotterdam in The Netherlands were among those to lose their jobs, and more protests are planned for this weekend to campaign against the move by P&O.
Meanwhile, the boss admitted that the new crews are being paid below the UK’s minimum wage apart from on domestic routes, but insisted this is allowed under international maritime rules.
Mr Shapps said the move from the Government would force a “U-turn on what’s happened at P&O”.
“What I’m going to do … is come to Parliament this coming week with a package of measures which will both close every possible loophole that exists and force them to U-turn on this,” he said.
“We are not having people working from British ports … plying regular routes between here and France or here and Holland, or (anywhere) else, and failing to pay the minimum wage. It’s simply unacceptable and we will force that to change.”