Chile's Economy Minister Luis Felipe Cespedes has apologised for his reaction upon being presented with an inflatable sex doll at an industry dinner on Tuesday.
He could be seen laughing when he was given the doll by the head of Chile's Manufacturers' and Exporters' Association, Roberto Fantuzzi.
Mr Cespedes said he had been "caught by surprise" by the present.
Many Chileans expressed their outrage at the incident on Twitter.
Mr Fantuzzi handed Mr Cespedes the naked doll on stage at the annual dinner of the Manufacturers' and Exporters Association (known by the acronym Asexma).
The doll had a sign pasted over its mouth reading "To stimulate the economy".
Photos of the event show Mr Cespedes laughing and later walking off the stage holding the doll.
Mr Fantuzzi is known to hand "humorous" gifts to his most high-profile guests at the annual dinner, but none of the others was as controversial as that given to Mr Cespedes.
Senator Alejandro Guiller, who is expected to run for president in 2017, was given a hobby horse "to catch up with the other candidates".
After the photos of the dinner were published in local newspapers, many Chileans took to social media to vent their anger.
Many called the minister's reaction "inappropriate".
Journalist Consuelo Saavedra tweeted: "What a shameful joke to hand an inflatable doll to Minister Cespedes 'to stimulate the economy'."
Others said the present was a sign of how misogynistic Chilean men were and how women were widely viewed as objects.
The most high profile Chilean to react was President Michelle Bachelet, who said that such incidents could not be tolerated.
Her comment was retweeted more than 1,300 times.
Mr Fantuzzi also tweeted to apologise. He said that he had daughters and granddaughters and that it had never been his intention to generate violence against women.
While many of the comments were negative there were also those who defended Mr Fantuzzi saying that the present had been a "joke" and those who criticised him should "light up".
Some newspapers also took the opportunity to recall gaffes made by past Chilean politicians - such as the joke former President Sebastian Pinera told at a heads of state meeting in 2011.
"Do you know what the difference between a politician and a lady is?" President Pinera asked at the meeting in Mexico.
"When a politician says 'yes', he means 'maybe', when he says 'maybe', he means 'no', and if he says 'no', he's not a politician," he continued.
"When a lady says 'no', she means 'maybe', when she says 'maybe', she means 'yes', and if she says 'yes', she's not a lady'," he said, as some in the audience laughed.
A number of women bemoaned the fact that attitudes towards women in Chile seemed to have changed little since Mr Pinera made that joke five years ago.