The troubled tycoon, 66, was named in the House of Lords as the businessman who had won an injunction to stop reports that he had allegedly racially bullied and groped employees.
Following the revelation some workers at Arcadia, which includes retailers Topshop and Miss Selfridge, are said to have threatened to hand in their notices insisting they could no longer work with Green.
A crisis meeting is then believed to have been held this afternoon to discuss the concerns which certain staff members had raised.
The Sun has approached Arcadia Group for comment.
Green says he "categorically" denies the allegations made against him.
This comes as shoppers are threatening to boycott Topshop after the Croydon-born mogul’s unmasking by ex-minister Peter Hain in the Lords.
Twitter has been flooded with shoppers saying they want to boycott all of the billionaire's stores including Topshop, Miss Selfridge and Dorothy Perkins.
Messages were accompanied by the hashtag #PinkNotGreen, championing "pink" feminism over Sir Philip's surname.
One tweeter posted: "Phillip Green owns one of the biggest stores on the high street and clothes millions of British teens.
"How dare he. How very dare he. #MeToo #PinkNotGreen."
Another wrote: "Fully boycotting @Topshop #PinkNotGreen."
And a third person posted: "Yet another reason to stop shopping in all his stores #pinknotgreen."
The scandal has once again led calls from MPs for Green to be stripped of his knighthood.
former Labour minister and long-serving MP Frank Field, 76, renewed calls for the controversial billionaire to lose his knighthood.
He said: “The charge sheet against the knighthood is growing. Parliament and the country have made their views clear on this matter.”
Lib Dem leader Vince Cable, 75, also called for Green to lose the honour which he was given by Tony Blair’s Labour government in 2006.
Sir Vince told The Sun: “I find it very difficult to see how he could credibly hold on to an honour in these circumstances.
“I think Parliament's proving its worth. The use of Parliament in this way is healthy and it shows democracy at work.”
This is not the first time MPs have called for the Topshop boss to be stripped of his prestigious title – after Green left high street chain BHS with a huge £571million hole in its pension fund.
Following his outing today in the House of Lords by ex-minister Peter Hain, Labour MP Clive Lewis tweeted: “Sir Philip Green named as man at centre of UK #MeToo Scandal.
“Given this non-disclosure payments story and his part in the BHS pensions scandal I'd bet good money 'Sir' won't be part of his title for much longer.”
This morning we told how a well-known socialite believes she was a victim of the gagging-row tycoon, and accused him of groping her.
In an anonymous first-person account, she said: “He loved that I was scared.”
Green has now released a statement denying the allegations while appearing to admit that some former staff members have received settlements following complaints.
He said: "I am not commenting on anything that has happened in court or was said in Parliament today.
"To the extent that it is suggested that I have been guilty of unlawful sexual or racist behaviour, I categorically and wholly deny these allegations.
"Arcadia and I take accusations and grievances from employees very seriously and in the event that one is raised, it is thoroughly investigated.
"Arcadia employs more than 20,000 people and in common with many large businesses sometimes receives formal complaints from employees.
"In some cases these are settled with the agreement of all parties and their legal advisers.
“These settlements are confidential so I cannot comment further on them."
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