Election: Labour suspends former Minister in campaign lies

The Labour MP was stripped of his seat and barred from the Commons for three years under the ruling – the first of its kind in 99 years – but said he would seek a judicial review.

The specially-convened election court had heard Mr Woolas stirred up racial tensions in a desperate bid to retain his seat in Oldham East and Saddleworth. His campaign team was said to have set out to "make the white folk angry" by depicting an alleged campaign by Muslims to "take Phil out".

Liberal Democrat candidate Elwyn Watkins mounted the rare legal challenge over the statements made in a pamphlet and two mock newspapers distributed in the final stages of the election.

Mr Woolas won on May 6 by just 103 votes.

Ms Harman, who is also party chair, said: "The court has found that Phil Woolas said things that he knew were untrue during his election campaign.

"It is no part of Labour's politics to try to win elections by telling lies. We believe in good community relations – in fact that is central to our politics – and Phil Woolas has been suspended from the Labour Party.

"The legal precedent set by this court judgment raises complex issues, including the dividing line between justified political debate and unacceptable remarks."

A fresh election will be held. Commons Speaker John Bercow will make a statement to MPs on Monday regarding the judgment and its implications.

As a result of the judgment Mr Woolas - appointed a frontbench immigration spokesman by new Labour leader Ed Miliband - is also barred from voting in general and local elections or standing for any elected public office for three years.

He was also ordered to pay 5,000 to Mr Watkins - the sum he paid to the court when he launched the petition and must also bear his former rival's costs.