The tweet was apparently in response to unfounded reports from a “No 10 source” Ms Merkel had insisted in a phone call to Boris Johnson that Northern Ireland remains within the European Union’s customs union when the rest of the UK leaves the bloc.
After the tweet generated widespread outrage, co-founder of the organisation Arron Banks admitted it “went too far”, but said “the real outrage is the German suggestion that Northern Ireland be separated from the UK”.
He added: “On reflection the point could have been made better.”
Leave.EU tweeted “We’re sorry”, alongside an emoji of a downcast face.
Despite the anonymous reports from Downing Street on Tuesday morning that Ms Merkel was insisting Northern Ireland remained in full regulatory alignment with the EU, Mr Johnson’s official spokesperson later refused to confirm whether this was an accurate account of the phone call between the two leaders.
The British reports of the call generated an irate response from European council president Donald Tusk, who accused Mr Johnson of playing a “stupid blame game” risking “the future of Europe and the UK”.
Before Leave.EU deleted the tweet calling Ms Merkel a “Kraut”, both Mr Banks and the organisation’s communications director, Andy Wigmore, defended it.
Responding to criticism from former Mirror editor Piers Morgan – who said it made them look like “racist idiots” and confirmed “the very worst stereo-typical impression of Leave voters” – Mr Banks responded on Twitter: “A German leader suggested annexing Northern Ireland and said we can only leave if we agree. Our response was mild!”
And Mr Wigmore also responded to criticism – in his case from Richard Tice – the chair of Nigel Farage’s Brexit Party, who said it was “stupid and offensive”.
Mr Wigmore responded: “Oh shut up @TiceRichard – you loved it, stop being so pompous….”
Mr Johnson has maintained he is still seeking an exit deal with the UK which Ireland can agree to, and the prime minister held emergency talks with Irish leader Leo Varadkar on Tuesday evening.
A Downing Street spokesperson told reporters afterwards: “The prime minister spoke to the taoiseach, Leo Varadkar, tonight. Both sides strongly reiterated their desire to reach a Brexit deal. They hope to meet in person later this week.”
Even as the anonymous briefings from No 10 – widely attributed to Mr Johnson’s adviser Dominic Cummings – were being reported in the press, officials in Brussels said talks between the UK and the EU were continuing as normal, though David Sassoli, the European parliament president, later said there had been “no progress”.
Mr Johnson has repeatedly said he would not seek an extension to the Brexit deadline, though court documents indicate he has privately promised to do so in order to comply with a law laid down by parliament.