Labour has removed the party whip from Chris Williamson for the second time this year - two days after he was readmitted to the party following a four-month suspension.
The party said the decision to lift his suspension was now under review and he would therefore not be allowed to sit as a Labour MP.
The Derby North MP, a close ally of Jeremy Corbyn, was first suspended in February after being recorded claiming Labour had “given too much ground” and been “too apologetic” in tackling antisemitism.
On Wednesday, a panel consisting of three members of Labour’s National Executive Committee (NEC) ruled that he should be let off with a warning and readmitted to the party without further punishment.
The decision sparked a furious backlash, with Jewish community groups voicing their anger and more than 170 Labour MPs and peers calling on Mr Corbyn to ask that the ruling to be overturned.
Senior figures from across the party, including Momentum founder and chair Jon Lansman, condemned the NEC panel’s judgement, while 60 MPs went as far as launching their own attempt to remove the whip from Mr Williamson.
As pressure on Mr Corbyn mounted, Jennie Formby, Labour’s general secretary, wrote to members of the NEC to inform them that the case would be discussed at their next meeting.
A Labour source said: “Subsequently, the whip is not restored as the decision is still pending.”
Under party rules, only the NEC has the power to overturn the decision of the three-person panel. If it decides to do so, Mr Williamson would be referred to Labour’s quasi-judicial disciplinary body, the National Constitutional Committee, for a full investigation.
As the row descended into farce, Labour sources said Ms Formby’s decision to refer the matter to the NEC came after Keith Vaz, who was one of the three members of the disciplinary panel who had supported lifting the suspension, wrote to her asking for the ruling to be reviewed.
Mr Vaz said the fact that details of the discussions had been “selectively leaked to the media” meant the rulings “cannot stand”. The leak could be the basis of a “legal challenge” from Mr Williamson and others under investigation, he added.
NEC sources predicted that there would be a major row over the case and said it was difficult to predict what the outcome would be, given some members of the committee are expected to back Mr Williamson.
One told The Independent: “It’s impossible to predict how it will go. I wouldn’t say it’s cut and dry just because anyone with an ounce of common sense can see what’s going on.”
On Friday, the Labour leadership insisted it would be “wholly inappropriate” for Mr Corbyn to intervene in the matter, prompting MPs to launch a bid to take the matter out of his hands and remove the whip from Mr Williamson themselves.
More than 60 of them signed a letter to the executive committee of the Parliamentary Labour Party (PLP), which represents MPs and peers, asking them to call a vote on whether Mr Williamson should have the whip removed.
They said: “Due to the exceptional circumstances in this case we are of the view that the allegation of bringing the Labour Party into disrepute made against Chris Williamson warrants an investigation by the Parliamentary Committee ... and full consideration given to a recommendation of removal of the whip to the PLP.
“We therefore seek to ask the PLP to take action to suspend the whip from Chris Williamson for a period of a year.”
Mr Lansman had earlier claimed that Mr Williamson’s response to his readmission had shown “not one iota of contrition nor any acknowledgement of wrongdoing following a further formal warning from the Labour Party for behaviour grossly detrimental to the party”. He added: “Such contempt for the party’s verdict! He has to go!”
More than 170 Labour MPs and peer had signed a public statement calling for Mr Corbyn to intervene.
They said: “It is clear to us that the Labour Party’s disciplinary process remains mired by the appearance of political interference. This must stop. We need a truly independent process.
“Ultimately, it is for Jeremy Corbyn to decide whether Chris Williamson retains the Labour whip. He must remove it immediately if we are to stand any hope of persuading anyone that the Labour Party is taking antisemitism seriously.”
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