Mr Freeman, who made headlines by organising a 'Tory Glastonbury' for party activists in the summer, said Conservative chairman Patrick McLoughlin needed to be replaced and called for a new team at CCHQ to rejuvenate the party.
It comes in the wake of several high-profile departures from Ms May's top team, as Sir Michael Fallon stood down as Defence Secretary amid sexual harassment allegations while International Development Secretary Priti Patel was also forced to resign for holding a string of secret meetings with senior Israeli figures.
Mr Freeman had clashed with Downing Street on the party's direction and wrote to Ms May saying the Tories risked alienating young voters if it allowed itself to be "defined as narrow party of nostalgia, hard Brexit, public sector austerity and lazy privilege".
Writing on the website ConservativeHome, he said: "I’ve stood down as Chair of the Prime Minister’s Policy Board in Number Ten, to focus on my role as Chair of the Conservative Policy Forum.
"We need a strong Conservative forum and voice – outside of, but heard inside, Government."
Mr Freeman said an "ambitious" programme of party reform was needed to reconnect with younger voters in the wake of the Tories' "ill-conceived" general election campaign.
Labour seized on the news as evidence of further chaos under Ms May's leadership, claiming it showed the "lazy privilege" at the top of the party.
Shadow Cabinet Office minister Jon Trickett said: “For a man who once said that the ‘raison d’ être’ of his role in No.10 was to face the challenge of renewal in office, his resignation speaks volumes on the current state of the Tories in Government.
“He has caught the essence of the Conservative Party in a two word phrase: lazy privilege. It tells you all that’s wrong with Theresa May’s Government because they are working for the few, while Labour is working for the many.”
However Mr Freeman took to Twitter to condemn their comments as "Labour troublemaking", adding: "I agreed with No10 in July to review the role of the Policy Board after Conference, and last week we agreed to wind up the Board in No10 and focus on my work as Chair of the Conservative Policy Forum on party renewal."
The Tory MP was originally appointed to chair the Number 10 policy board when Ms May became Prime Minister last July, although it is understood it has not been re-established since the general election.
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