Published Thursday, 13 December 2012
Mr McCrea spoke out of line with party policy. (© UTV)
The Lagan Valley MLA said he received the news on Thursday morning.
It comes after he spoke against the party line when he agreed with Alliance about only flying the Union Flag from Belfast City Council on some days.
UUP leader Mike Nesbitt said Mr McCrea's recent comments have shown an "inability to exercise self-discipline or demonstrate the basic characteristics of teamwork".
He added that he is doing "enormous damage" to the party.
Mr McCrea told UTV he was disappointed to learn of the decision.
He continued: "I've been trying to point out what is the right way forward and put out constructive ideas and frankly I'm disappointed. I told Mike that I don't think it's the right way forward, but it's Mike's decision and that's what he's done.
"If I voted for designated days in Lisburn and if in Stormont we have designated days and other councils then why would I take any different opinion wherever I am?
"To my mind this is UUP policy and I was just bringing it to the attention of people and I also happen to think it's the right way forward - but I do think all-party talks are the way to resolve these issue."
I think it's been a disappointing outcome when I tried to put forward my arguments in the appropriate place and the appropriate way.
A number of UUP councillors in Belfast called for action to be taken over Mr McCrea's stance on flying the flag at City Hall.
The issue was discussed by the party executive over the weekend.
Mr McCrea attended a UUP assembly group meeting which unanimously empowered the Assembly commission representative to discuss the issue of flying the flag at Stormont.
However he later said the move was being taken at the wrong time.
A statement from the party said: "Within 48 hours he was quoted in a newspaper as saying 'it was not the right time' to do what he had endorsed.
"Twenty-four hours later, he described Monday's decision as a 'stupid idea' on live radio.
"For the reasons of lack of self-discipline and teamwork, and for those reasons only, he has left me no choice but to remove the party whip with immediate effect."
DRD Minister Danny Kennedy said Mr McCrea had "failed to discharge his duties in a fashion of teamwork with collective responsibility".
"The party have shown its clear leadership on the issue of flags, and other issues and Basil has failed to accept that publicly," he said.
Mr McCrea said he stands by his recent statements, saying "it was time that somebody was speaking out for the ordinary people of this country".
He said he would be "keeping an open mind" about his position within the Ulster Unionist Party.
He added: "I am going to reflect with my colleagues, the people I hold nearest and dearest, and I am going to reflect on what is the right thing to do for the people of Northern Ireland and for my electorate."
However South Down MLA John McCallister said the decision to remove the party whip from Basil McCrea was "unnecessary".
"The statement that Basil put out, was measured, sensible," he told UTV.
"I mean we have had an absolutely appalling ten days in Northern Ireland, the damage to our economy, to our small businesses, to traders in Belfast, and the reputation of Northern Ireland has been absolutely appalling.
"How can politicians and political leaders not be coming out and saying 'we have to find a better way of doing this' or finding agreement on these very difficult issues?"
© UTV News