Ehud Barak and four other former members of Israel’s Labour faction have announced they are to form a new centrist political party.

Mr Barak, who currently serves as defence minister in Benjamin Netanyahu’s coalition government and was Israel’s 10th prime minister, revealed the creation of the “Independence” party in an open letter to parliament.

The letter said: "The new independent faction will be a centrist Zionist and democratic faction and will advance these ideas in the Knesset and the coalition, and in the future in public.”

The decision is understood to have been made because of internal party divisions over the Middle East peace process.

Mr Barak has expressed concern that Labour is taking too doveish a stance when it comes to negotiations with the Palestinians, while party members have criticised him for supporting Mr Netanyahu’s hard-line attitude.

Mr Barak, who was joined in the move by Knesset members Matan Vilnai, Einat Wilf, Orit Noked and Shalom Simchon, told a press conference that the party would be “a new path”.

He said: "We want to wake up without having to compromise, apologise and explain."

The five will remain within the coalition as a distinct faction, calling into question the future of the remaining eight Labour members who also serve in it.

Under the Israeli political system the party must meet legal requirements before it gains official status.

The split comes six years after similar upheaval in the right-wing Likud party when politicians led by Ariel Sharon set up the centrist party Kadima.