Michael Foster, a leading Jewish Labour donor and outspoken critic of Jeremy Corbyn's leadership, has been suspended from the party.
The BBC reported Labour had removed the retired showbusiness agent for allegedly breaching election rules which ban "abuse of any kind" by members or supporters.
Mr Foster, whose family has given over £400,000 to Labour, wrote an article in the Mail on Sunday last month, headlined "Why I despise Jeremy Corbyn and his Nazi stormtroopers'.
In it, he said some of Mr Corbyn's aides bullied opponents and had no respect for the "the rule of law".
Mr Foster, who had lost a High Court battle to prevent Mr Corbyn running in the Labour leadership contest, claimed the court had handed a victory to “Corbyn and his Sturm Abteilung (stormtroopers)".
At the time, the Board of Deputies described the article as "inflammatory".
Mr Foster received news of his suspension in a letter from Labour general secretary Iain McNicol, confirming he was being investigated over the Mail article.
In response, Mr Foster, who stood unsuccessfully as a Labour parliamentary candidate in the 2015 general election, said he had not used the word "Nazi" himself in the piece - it had been added to the headline by the Mail.
He said his "stormtrooper" comment referred to the "cadre" surrounding Mr Corbyn which could also be described as a "Pretorian Guard or Red Guard" - a group formed "to secure the leader and his political plans".
It has also emerged that Mr Corbyn will send either Mr McNicol or Tom Watson - his deputy leader - to Israel after turning down an invitation to go himself.
Isaac Herzog, the leader of Labour’s sister party in Israel, wrote to Mr Corbyn in April to ask if his counterpart would accompany him to Yad Vashem to “witness the last time Jews were forcibly transported - to their deaths.”
Mr Corbyn waited for several weeks before responding, in June, that he was too busy to make the trip.
“My existing commitments make it impossible for me to take up your offer in the immediate future,” he told Mr Herzog.
He added that he planned to send Mr Watson or Mr McNicol to the country in November.
Meanwhile a former policy adviser to Mr Corbyn has claimed he was instructed to remove a Hebrew message from a Passover greeting because it might look "Zionist".
Joshua Simons, who no longer works for the Labour leader, said he was told by a senior aide: "to remove the greeting “Chag Kasher VeSameach” from Corbyn’s Passover message,"
This was, he said, "For fear that Corbyn’s supporters might think the use of Hebrew “Zionist”.
In a piece published on the Guardian website, Mr Simons said the way Mr Corbyn and his allies regarded Jews was shaped by "a frenetic anti-imperialism, focused on Israel and America".
He added: "As a Jew, I had a special obligation to criticise Israel’s settlement policy, but when I did, it was never quite believed".
But Mr Simons, a Cambridge graduate and Kennedy scholar, insisted antisemitism was not rife in the party