Controversial Labour MP Chris Williamson has been allowed back into the party following his suspension over his claim it had been “too apologetic” over the antisemitism row.

A three-person panel decided on Wednesday to reject a recommendation by party officials to refer the Derby North MP to the next stage of Labour's disciplinary process.

It is understood that Keith Vaz, the Labour MP for Leicester East, led calls for Mr Williamson’s suspension to be dropped despite allegations of a "pattern of behaviour" going back months on issues involving antisemitism.

Reacting to the lifting of Mr Williamson’s suspension, Jewish Labour MP and JLM parliamentary chair Ruth Smeeth said : “Chris Williamson has demonstrated a pattern of behaviour over a period of many months seemingly seeking to intentionally undermine, marginalise and harass the British Jewish community and Jewish Labour Party members, which has continually brought the Labour Party into disrepute.

“The fact the the NEC disputes panel has today ignored the recommendations of Labour Party staff to let him off with a slap on the wrist is simply appalling.

“It’s no surprise that the Labour Party is being investigated by the EHRC for institutionalised anti-Jewish hatred. I’m truly disgusted that he’s being readmitted to the Labour Party.

Former Labour MP Ian Austin commented: “It is a complete disgrace that Chris Williamson, who has caused huge offence to Jewish people, is let off with just a warning.

“This shows the extent to which a party which had such a proud record of fighting racism has been poisoned under Jeremy Corbyn. The only question is what decent Labour MPs will finally say enough is enough and do something about it”.

Board of Deputies Vice President Amanda Bowman said the lifting of the suspension was “an utter disgrace”. She added: “Despite years of baiting the Jewish community – calling antisemitism allegations ‘proxy wars and bullshit’, actively supporting people suspended and expelled from the party for antisemitism, attacking the Board of Deputies on the day of the Pittsburgh attack, and saying that Labour has been ‘too apologetic’ over antisemitism, Chris Williamson has reportedly been readmitted to the Labour Party. This is yet more damning evidence for the EHRC’s inquiry into antisemitism in the Labour Party.”

Mr Williamson was branded a "Jew baiter" in December after signing a petition defending notorious antisemite Gilad Atzmon.

Anti-racist advocacy group Hope Not Hate has said Mr Atzmon was “an antisemite who has promoted the works of Holocaust deniers”, while the Community Security Trust described Mr Atzmon book, the Wandering Who?, as “quite probably the most antisemitic book published in this country in recent years”.

On Wednesday, as Mr Williamson’s suspension was lifted, Labour said they had issued him with a formal warning after being found to have breached the party's rules.

A Labour source said: "He could face further, more severe, action if he repeats any similar comments or behaviour."

A party spokesman said: "The Labour Party takes all complaints extremely seriously, which are investigated in line with our rules and procedures. We can’t comment on individual cases."

Mr Williamson had sparked fury back in February after the Yorkshire Post published footage showing the MP, who is a close ally of Jeremy Corbyn, telling activists Labour had been "too apologetic" over antisemitism and was being "demonised as a racist, bigoted party".

The Derby North MP issued an apology saying: “I deeply regret, and apologise for, my recent choice of words when speaking about how the Labour party has responded to the ongoing fight against antisemitism inside of our party. I was trying to stress how much the party has done to tackle antisemitism.”

It also came just a week after nine Labour MPs quit the party, including Jewish MP Luciana Berger, citing antisemitism as one of the main reasons for the move.

Shortly afterwards, a spokesman for Mr Corbyn announced Mr Williamson had been issued with a “notice of investigation”; but he would remain a Labour member while a “pattern of behaviour” was examined.

But general secretary Jennie Formby eventually succumbed to intense pressure from Labour MPs – including deputy leader Tom Watson - and suspended the Mr Williamson.

Website Politics Home also confirmed on Wednesday that Mr Vaz led the moves to reject a recommendation from Labour staff that Mr Williamson be referred to the party's National Constitution Committee, which deals with serious disciplinary cases.

He argued that because Mr Williamson represents a marginal seat and that Labour MPs have less than two weeks to tell party bosses whether they wish to stand at the next election, he should be let off with a warning. 

JLM National Chair Mike Katz said: “How dare the Labour Party deny it is institutionally racist against Jews when it decides to take no action against Chris Williamson?

"It seems the decision to let him off is because he represents a marginal seat and there might be a snap election. It's good to know that a party of anti-racists, led by an avowed anti-racist, decides it’s OK to ignore anti-Jewish racism if there's a vote to be won.

"This decision stinks and shows the moral turpitude the party finds itself in."

The Jewish Leadership Council said: “This decision beggars belief. The lack of transparency and clarity around the process of why Mr Williamson has had his suspension lifted lends credence as to why the EHRC is investigating whether the Labour Party discriminates against Jewish people. Mr Williamson has shown no remorse. He will offend again and this decision is a slap in the face for the Jewish community."

In further actions that inflamed Jewish MPs and the community, Mr Williamson had in February also booked a committee room in the House of Commons for a screening of a documentary by Jackie Walker, who was later expelled by Labour over allegations involving antisemitism.

Mr Williamson also described the parliamentarians who marched in solidarity with  MP Ms Smeeth at an antisemitism hearing against activist Marc Wadsworth, who was later expelled by the party as “white privileged”.

He also claimed Tony Greenstein – who was expelled for allegations involving antisemitism – had a right to hold his “anti-Zionist views”.

Mr Williamson was also revealed to have been a member of the Palestine Live Facebook group, which included openly antisemitic members.

In March Mr Corbyn himself faced claims he "couldn't care less about eradicating anti-Jewish prejudice" after he was overheard calling suspended Labour MP Chris Williamson his "comrade".

The Labour leader sparked fury as he was seen patting the Derby North MP on the back after he approached Mr Williamson on the floor of the House of Commons during a packed vote on Brexit negotiations.