Mr Williamson was suspended in February pending an investigation after he claimed Labour had been “too apologetic” in response to complaints on the issue.
The MP for Derby North was issued with a “notice of investigation for a pattern of behaviour” and a decision was later taken by the party’s general secretary Jennie Formby to suspend him.
The disciplinary investigation has since concluded and he has now been allowed to fully return to the Party.
But the decision, announced on Wednesday, was met with outrage, with the Board of Deputies of British Jews calling it a “disgrace” and several high-profile Labour MPs hitting out at the move.
Veteran MP Margaret Hodge described the Party’s complaints process as “a complete sham”.
Party sources confirmed Mr Williamson had been given a formal sanction, by a National Executive Committee anti-Semitism committee. The source said he could face further action if he makes similar comments in future.
A source said: “An NEC panel, advised by an independent barrister, found Chris Williamson had breached the Party’s rules and gave him a formal sanction. He could face further, more severe, action if he repeats any similar comments or behaviour.”
The Board of Deputies of British Jews vice president Amanda Bowman said: ”Despite years of baiting the Jewish community, Chris Williamson has reportedly been readmitted to the Labour Party.
“This is yet more damning evidence for the EHRC’s inquiry into anti-Semitism in the Labour Party.”
Gideon Falter, Chief Executive of Campaign Against Antisemitism, said: “The decision to reinstate him shows that the Labour Party’s leadership holds British Jews in contempt and demonstrates that the Equality and Human Rights Commission was right to act on our referral and open a full statutory investigation into Labour’s antis-Smitism crisis.”
Anti-racism campaign group Hope Not Hate was also critical, calling the lifting of the suspension “wrong and alarming”.
Campaign director Matthew McGregor continued: “This is not a decision that will give any reassurance to the Jewish community that Labour is taking the issue of anti-Semitism in its ranks seriously enough.”
Labour MP Stella Creasy suggested the timing of the case could be linked to the party’s efforts to get candidates in place for the next election.
MPs have been given until July 8 to say if they wish to seek re-selection in their seats.
Ms Creasy said: “The decision to let Chris Williamson back into party in time for him to stand again as a Labour candidate is best example yet of why we need an independent process for anti-Semtism and sexual harassment complaints and not mates’ rates.”
Ms Hodge tweeted: “Ignoring Chris Williamson’s vile track record of antisemitism just for a vote is disgusting! He should have been kicked out of the party for good months ago.”
Independent MP Ian Austin tweeted: “It’s a disgrace that Chris Williamson is let off with a warning. It shows the extent to which a party which had a proud record on racism has been poisoned under Jeremy Corbyn. The only question is when decent Labour MPs will finally say enough is enough and do something about it.”
Mr Austin cited a “culture of extremism, anti-Semitism and intolerance” when he quit Labour in February.
Boris Johnson tweeted: “Shameful that Labour have reinstated this key Corbyn ally back into their party after his appalling remarks. We must never allow these apologists for anti-Semitism anywhere near government.”
Mr Williamson was suspended after video footage showed him telling a meeting of the grassroots Momentum group that Labour’s reaction to anti-Semitism allegations had led to the party being “demonised”.
He was also filmed saying he had celebrated the resignation of MP Joan Ryan, who quit Labour in protest over the handling of anti-Semitism and bullying complaints.
A Labour Party spokesperson 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 has been contacted for comment.
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