Lord Ahmed has resigned from the Labour Party ahead of a disciplinary hearing into claims he made comments about a Jewish conspiracy.
He was due to face party executives tomorrow after being suspended by the party in March.
The Times uncovered footage recorded in Pakistan in which Lord Ahmed was said to have claimed - while speaking in Urdu - that Jewish lawyers and media were responsible for the length of a prison term he received for causing a fatal car crash.
In a JC interview last week Lord Ahmed suggested he may leave the party before the hearing if he was not presented with a full recording of the interview.
In his resignation letter to party executives Lord Ahmed wrote: “I have been considering my position over the weekend and have concluded that I should resign from the membership… I reject the core story that emerges out of the alleged interview.”
Referring to an earlier apology he made in the case, Lord Ahmed said: “Needless to say that I have many Jewish friends and I felt it was important and necessary to do this.”
Lord Ahmed had previously said he could not remember making the remarks, but apologised unreservedly and said he would be “utterly devastated” if it was proved that he had spoken in such terms.