The mayor was due to begin his four-week suspension tomorrow for bringing his office into disrepute by making a Nazi jibe to a Jewish reporter.
But a judge, sitting in private, ruled in an 11th hour decision that Mr Livingstone was entitled to have the controversial sanction stayed pending his statutory appeal.
On Friday, a three-man committee of the Adjudication Panel for England unanimously found Mr Livingstone guilty of being "unnecessarily insensitive and offensive" in comparing Jewish Evening Standard newspaper reporter Oliver Finegold to a Nazi concentration camp guard.
The tribunal decided that the mayor was in breach of the Greater London Authority code of conduct.
The mayor's legal team will argue at the appeal, expected to take place later in March, that the tribunal's decision breaches his Article 8 right to private life under the European Convention on Human Rights.
His lawyers will also contend it contravenes his right to freedom of expression under Article 10 and the four-week suspension is an "inappropriate" sanction.
Even before any further legal action, Mr Livingstone faces a hefty bill for legal costs which tops £80,000.
But earlier today Mr Livingstone vowed to fight the case all the way to the House of Lords, if necessary, even though it could cost "hundreds of thousands of pounds" if he loses.
Mr Livingstone said: "If the Adjudication Panel (for England) had reprimanded me but not imposed the penalty, I would most probably have said we will see what Londoners think at the ballot box next time."
He added: "I have no intention of apologising because I don't believe it."
He accused the Board of Deputies of British Jews of making the original complaint only to try to "hush" him up over his views on the Middle East.
They want him to "tone down" his views on the Israeli government, he claimed, adding: "For decades the charge of anti-Semitism has been used to try to suppress any meaningful debate about the policies of the Israeli government.
"Londoners who may have seen George Clooney's recent film Goodnight And Good Luck will recognise the tactic of McCarthyism updated for a new age.
"It will not stop me from continuing to discuss the need for a just settlement in the Middle East that recognises the right of Israel to exist side-by-side with a viable Palestinian State."
Mr Livingstone became embroiled in his current problems after he was approached, while off duty, by Mr Finegold as he left a party marking 20 years since former Culture Secretary Chris Smith became Britain's first openly-gay MP.
Mr Livingstone asked Mr Finegold whether he had ever been a "German war criminal".
On hearing that Mr Finegold was Jewish, the mayor likened him to a Nazi concentration camp guard.
The panel was told Mr Livingstone had been expressing his long and honestly-held political view of Associated Newspapers, publishers of the Daily Mail and Evening Standard.
Mr Livingstone accused Associated Newspapers of a history of anti-Semitism and the Evening Standard of "harassing" the largely-gay private reception. The party was paid for from public funds.
In the storm which followed, Mr Livingstone said he was using his freedom of expression and had never meant offend the Jewish community or downplay the Holocaust.
Jon Benjamin, of the Board of Deputies of British Jews, denied today there was a witch hunt against Mr Livingstone.
He said: "I think he is really just trying to spin this and create a smokescreen to justify what he did.
"He made the comments. He decided not to apologise and to make it worse. Now we are in the realms of legal argument but that does not get away from what he said a year ago which caused national uproar and even brought calls from the Prime Minister for him to apologise.
"With freedom of expression comes responsibility to be sensitive to other people's feelings."
The Standards Board for England, which investigated the complaint against Mr Livingstone, said it would not challenge the suspension being stayed.
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