A party disciplinary committee decided yesterday that Mr Sarwar, who gave pounds 5,000 to an election rival but said that it was a loan, had failed to explain himself adequately. There was a prima-facie case that he was guilty of "action grossly detrimental to the party", a report into the affair said.
The new MP for Glasgow Govan will lose the right to hold Labour Party office and will have the Parliamentary whip suspended. His local party will be suspended until October, and its affairs will be run by Scottish Labour Party officials alongside its existing officers.
Mr Sarwar, Britain's first Muslim MP, has denied that he tried to bribe Bardar Islam, an independent Labour candidate, to ease off his election campaign. He faces further allegations that he bribed two other fringe candidates, Peter Paton and Jamil Abbassi.
Police are investigating the allegation and a further claim that he tried to rig the ballot by enrolling new voters.
The party report, passed yesterday by the organisation committee of Labour's National Executive Committee, said: "His conduct, even if legal and unconnected with the election, is unbecoming and totally inappropriate for a Labour MP."
The action against Mr Sarwar will be two-pronged. Tomorrow, Labour MPs are expected to approve a rule which would allow the chief whip, Nick Browne, to adopt a new power to suspend an MP from the Parliamentary Labour Party without any presumption of guilt. Next week, the National Executive Committee will approve his suspension from party office and action against his local party.
Last night Mr Sarwar said that he was confident that the police inquiries would clear his name.
"I sincerely hope that once this has happened, the National Executive will lift the suspension. In the meantime I will continue to serve the Labour Party and the people of Govan to the best of my ability," he said in a statement
Mr Sarwar will lose the right to attend Labour meetings in the House of Commons but will still remain an MP. He will be allowed to attend branch meetings of his local party but not to sit on any committees.
The report recommended that the party's investigation should now be frozen until the police inquiry has been completed.Reuse content