A group which has donated more than £300,000 to Labour was not properly registered, the party has admitted.
Labour Party officials asked Muslim Friends of Labour to register as a members' association with party funding watchdogs after they were informed of the problem by the Electoral Commission.
The commission asked the party to clarify the status of the organisation last week after releasing figures showing that it has donated £312,000 to Labour so far this year. Muslim Friends of Labour was listed as an "unincorporated association" which does not have to declare the source of its funds.
By contrast, "members' associations", made up of party members, must give details of the individuals who fund any political donations.
The organisation is chaired by Mohammed Sarwar, a controversial Labour MP who was briefly suspended in the late 1990s before being cleared ina vote rigging scandal. Most of Westminster's Muslim MPs and peers are believed to be members.
Labour has previously attacked the Conservatives for receiving donations from the Midlands Industrial Council, a group of businessmen.
A Labour Party spokesperson said: "Muslims for Labour is an association made up of Labour members and supporters which does important work for the Labour Party both in fund-raising and in communicating our message to the Muslim community.''Reuse content