Police are investigating comments made at the Israel Apartheid Week event attended by Liberal Democrat peer Jenny Tonge, the JC can reveal.
Officers are reviewing remarks made by former US marine Ken O'Keefe following allegations that he incited racial hatred when comparing Jewish audience members to Nazis.
Baroness Tonge was sitting next to Mr O'Keefe as he screamed at audience members, said Israel "must be destroyed" and claimed Mossad was "directly involved" in the September 11 terror attacks on the United States.
She made no attempt to distance herself from him or his remarks, and launched her own tirade against Israel which has today been widely condemned from figures across the political spectrum.
Baroness Tonge told the audience at Middlesex University's Free Palestine Society that Israel would "not last forever" and would "lose support and then they will reap what they have sown".
She said Americans would tell "the Israel lobby in the USA: enough is enough".
A Lib Dem spokesman distanced the party from her comments made at the event last Thursday. He said they were not reflective of party policy and that her presence at the event was "extremely ill-advised and ill-judged".
During the heated debate Mr O'Keefe said: "If Israel is inherently a racist, apartheid state, then I want no part of it. Israel has no place in this world and it must, in its current form, if you want me to use some inflammatory language, be destroyed.
"The Jewish state is acting on behalf of the Jewish people. You [the Jewish people], like the Nazis, now have a special obligation. The decent Germans of World War Two, what did they do when the Nazis came to power and instituted their policies? Did they do enough to stop the Nazis? No, they didn't.
"What are the Jewish people doing right now? Are you doing enough to stop your racist, apartheid, genocidal state?"
Two pro-Israel activists in the audience reported Mr O'Keefe to police.
A Barnet Police spokesman said: "Evidence from the event is being reviewed. This is obviously a delicate investigation that will require balancing the right to free speech, and the rights of people not to be discriminated against".
Labour leader Ed Miliband responded to Baroness Tonge's comments by tweeting: "No place in politics for those who question existence of the state of Israel. Nick Clegg must condemn Jenny Tonge's remark and demand apology."
In a joint statement the Board of Deputies and Jewish Leadership Council said: "We call for the Whip to be removed immediately from Jenny Tonge. Given her long-standing, pernicious views on Israel, her comments are both sinister and abhorrent.
"There is no place for someone like Jenny Tonge in mainstream political parties in this country and it is time for the Liberal Democrats to act quickly and decisively, once and for all."
Mr Clegg originally sacked Baroness Tonge from her role as Lib Dem health spokesperson in the Lords in 2010 after she called for an inquiry into allegations Israeli Army staff trafficked organs while helping Haiti earthquake victims.
She was previously sacked in 2004 by Charles Kennedy for suggesting she would consider becoming a suicide bomber.
Baroness Tonge had preceded her comments on Israel by "welcoming" the JC to the event at the university's Hendon campus.
She said: "Can I give a big welcome to the Jewish Chronicle, I am sure they are here. Thank you for coming. I hope we give you lots of things you can say about us.
"However any of you like to interpret my remarks, I am not antisemitic. It is injustice that concerns me most.
"I am certainly anti the current Israel government and I am anti the Israel lobby that supports that government.
"I am not antisemitic. Get it? It is very important to make that distinction."
Baroness Tonge said that when the Israel lobby "decide to go for you, they will go for you in a big way. I bear the scars."
Labour Friends of Israel chairman John Woodcock MP said: "Nick Clegg must act. Comments and remarks such as these have absolutely no place in mainstream politics. Words of excuse or apology in response are no longer enough.
"Nick Clegg needs to take disciplinary action against his offensive peer to reassure people the government remains serious about a two-state solution."
Finchley and Golders Green MP Mike Freer said: "This is not a case of Baroness Tonge misspeaking but the most recent of a series of vehemently anti-Israeli statements and sharing platforms with people that I would consider extremists. Nick Clegg must bite the bullet and remove the Liberal Democrat whip from her once and for all."
A Liberal Democrat spokesman said: "Jenny Tonge does not speak for the party on Israel/Palestine. Her presence and comments at this event were extremely ill-advised and ill judged. The tone of the debate at this event was wholly unacceptable and adds nothing to the peace process.