Jeremy Corbyn is facing demands from dozens of Labour MPs and peers to suspend the party’s former disciplinary chief after she defended a council candidate accused of Holocaust denial.

Nearly 40 politicians, including several frontbenchers, wrote to the Labour leader calling for his close ally Christine Shawcroft to kicked out of the party and suspended from the National Executive Committee (NEC), the party’s ruling body.

It comes amid a swirl of allegations of anti Jewish prejudice within the Labour movement, with Mr Corbyn himself apologising for showing support for an antisemitic mural in 2012.

Ms Shawcroft was forced to resign as chair of Labour’s disputes panel on Wednesday when it emerged she had questioned the case of Peterborough candidate Alan Bull, who was suspended from Labour after he was accused of posting an antisemitic article on Facebook.

However critics said it was “highly offensive to the Jewish community” that she remains a member of the NEC.

In an open letter coordinated by Labour MP Siobhain McDonagh, the group said: “We are deeply concerned that Christine Shawcroft remains a member of the National Executive Committee (NEC).

“It is utterly wrong that someone who defends a Labour candidate who has been suspended for Holocaust denial should be a member of Labour’s governing body.

“This is highly offensive to the Jewish community and all those of us who wish to see the scourge of antisemitism eradicated.”

Other signatories included shadow treasury minister Jonathan Reynolds, Mike Kane, the shadow schools minister, and Lord Hunt of Kings Heath, a shadow health minister.

Ms Shawcroft, a senior figure in Momentum, said she was “deeply sorry” for her actions, saying: “I sent this email before being aware of the full information about this case and I had not been shown the image of his abhorrent Facebook post.

“Had I seen this image, I would not have requested that the decision to suspend him be re-considered. I am deeply sorry for having done so.”

Mr Corbyn’s office has not responded to questions on whether she should resign, but shadow chancellor John McDonnell earlier said it was right that Ms Shawcroft had quit the post but she did not need to also resign from the NEC.

It comes after the Labour leader faced protests outside Parliament and criticism from senior Jewish figures over claims he has failed to root out antisemitism in the party.

The Labour leader insisted he was “not an antisemite in any way” and called prejudice against the Jews “a cancer in our society”, as he acknowledged there had been 300 complaints of antisemitism in the party since he took the helm in 2015.

However his efforts to tackle the problem have been met with critcism. Labour peer Lord Winston, a respected scientist who is Jewish, said hostility towards Jews had “infected” the party.

He said: “I feel deeply ashamed of my party. Whether he likes it or not, Jeremy Corbyn has a lot to answer for. He has encouraged anti-Semites and he’s endorsed them.

“In the modern world using social media, their conspiracy theories about Jews and statements about hate, spread like a disease and this virus is infecting the Labour Party.”

Former prime minister Tony Blair also waded into the row to accuse Mr Corbyn’s inner circle of failing to grasp the urgency of the antisemitism crisis, telling the Labour leader the row could have “deep and damaging” consequences.

Mr Corbyn was also criticised by Labour peer Lord Levy for failing to contact him over antisemitic email he received, which he said was shown to Mr Corbyn on Wednesday.

Lord Levy told Newsnight: “There has to be a zero tolerance policy. Enough words. They are just not taking this seriously. I have never received such a disgusting email.”

However a Labour source said “Jeremy was shown some text on someone’s phone for a matter of seconds when he was on his way to vote.

“Of course, if something so serious had been raised with Jeremy in more than a passing way for a few seconds he would have been able to engage with it, and would, of course, have acted.”

Lord Levy said he had reported the email to the police.