Momentum has withdrawn its support for a member seeking re-election to Labour's ruling body following his "deeply insensitive" comments about Jews.
The key Jeremy Corbyn-supporting campaign group said it was "inappropriate" for Peter Willsman to call some members of the Jewish community "Trump fanatics" and suggest they were "making up" problems about anti-Semitism in the party.
It also stressed the need to acknowledge the "anger and upset" felt within the British Jewish community as it reaffirmed its commitment to "rooting out" anti-Semitism in the Labour Party and across society.
Momentum maintained its support for eight other National Executive Committee (NEC) candidates who support Labour leader Mr Corbyn.
Mr Willsman apologised, acknowledged the "offensive nature of my comments" and referred himself for equalities training after a recording emerged of his comments at an NEC meeting. But Jewish leaders called for Labour to expel him.
In a statement released on Twitter, Momentum said: "The elected officers of the national coordinating group (NCG) have decided to withdraw Momentum's support for Pete Willsman in Labour's ongoing NEC election. While it is welcome that he has made a full apology and will attend equalities training, his comments were deeply insensitive and inappropriate for a Momentum-backed NEC candidate."
It added: "Our movement is more than half a million strong and we must hold those who represent us to an even higher standard than ordinary Labour Party members. We must also acknowledge the anger and upset felt within the British Jewish community and reaffirm our commitment to rooting out anti-Semitism both in the party and across society.
"We recognise Pete's many years of service to the movement. In the coming months, we will review how we choose NEC candidates and work with other groups to make sure that our process is as open and transparent as possible."
Mr Willsman, in the clip acquired by the Jewish Chronicle, could be heard saying with a raised voice: "Some of these people in the Jewish community support Trump - they are Trump fanatics and all the rest of it. So I am not going to be lectured to by Trump fanatics making up information without any evidence at all.
"So I think we should ask the 70 rabbis 'Where is your evidence of severe and widespread anti-Semitism in this party?"'
Momentum's decision came as The Independent revealed that left-wing Labour activists in a constituency with one of Britain's largest Jewish communities made a series of provocative claims about Jews and antisemitism, in emails.
Leaked conversations show members Momentum group in Barnet, north London, claiming that security guards were stationed outside synagogues to “generate an atmosphere of insecurity” because “Zionists” want to “exploit and generate the fear of antisemitism”.
They alleged that some antisemitism was “manufactured” to scare British Jews into moving to Israel and argued it was legitimate to suggest the row over the issue was part of a “conspiracy” involving Jewish groups.
A spokesman for Barnet Momentum said it was a "private discussion email group is a political discussion forum."
He added: "If anyone was perceived to have made an inappropriate or objectionable comment, or one that could be perceived as racist, they would be challenged immediately and action would be taken if what has been shared has broken Momentum or Labour Party rules.”
In an open letter earlier this month, 68 rabbis called on Labour to adopt the full International Holocaust Remembrance Alliance (IHRA) definition of anti-Semitism, including its examples.
They said anti-Semitism within "sections of the Labour Party" had become "so severe and widespread that we must speak out with one Jewish voice".
But the NEC did not include all of the illustrative examples set out by the IHRA.
Labour insisted that, while they were not reproduced word for word, they are covered in the new code.
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