Lord Bingham of Cornhill made his remarks yesterday when the Court of Appeal published his reasons for quashing the conviction of Mrs Jones and her agent, Des Whicher, for making a false declaration of her expenses at the 1997 general election.
Mrs Jones' seat was declared vacant and she was ordered to do 100 hours of community service. But last week she won her appeal against the conviction and the High Court will rule next week whether she can resume her House of Commons seat or order a by-election to be held to fill the vacancy.
Her allies have claimed that her enemies in the Newark constituency party leaked information about her campaign finances to the Liberal Democrats, which led to the official complaint against her.
Yesterday Lord Bingham, dismissing allegations about Mr Whicher's use of a Ford Sierra car during the campaign, said: "There was evidence before the jury directly impugning Mr Whicher's honesty, but the evidence came from Mrs Jones' opponents in a party riven by personal animosity, and there were substantial grounds for viewing this evidence (all of which was strongly challenged) with grave scepticism."
The comments were embarrassing for Labour, but officials pointed out that the party's ruling National Executive Committee had already acted by suspending the Newark party.
Lord Bingham, sitting with Mr Justice Moses and Mr Justice Penry-Davey, said that neither of the two main grounds on which the prosecution had relied was capable of supporting a conviction.
The maximum for election expenses in Newark was set at pounds 8,905, he said, while Mrs Jones, according to the prosecution's opening, had incurred expenses of just under pounds 22,000. The Lord Chief Justice said there was no simple and decisive test to determine whether an expense was or was not an election expense within the 1983 Representation of the People Act. But there were some expenses about which "reasonable people", applying themselves to the question in all good faith, could reach different conclusions.
Referring to criticism over office expenses, Lord Bingham said the Neill Committee on standards in public life had made clear this was "a field in which misunderstanding is rife. If the jury convicted, or may have convicted, on this ground, we consider the convictions unsafe."
Mrs Jones and Mr Whicher were awarded their costs. The former MP smiled as her solicitor, Gerald Shamash, said he expected her future to be resolved within days.
"There's been an application made by the Attorney General on behalf of the Speaker for a positive declaration that Mrs Jones be entitled to take her seat," he said.
"The Attorney General is saying she should be there, and we'll be supporting that application."
The Speaker, Betty Boothroyd, has told MPs that it is "for the courts and not for the House to interpret the law", and wants an authoritative declaration on the true construction of the Act.