The Labour leader backed Azhar Ali to contest the by-election despite him having been recorded suggesting that Israel had allowed the 7 October Hamas attack to take place in order to invade Gaza.
But, in a dramatic climbdown on Monday night, the party said its support for Mr Ali had been withdrawn following “new information about further comments”. He has also been suspended from the Labour Party pending an investigation.
The latest comments were revealed by the Daily Mail and came at the same Lancashire Labour Party meeting Mr Ali made his earlier remarks about Israel. He is alleged to have said “people in the media from certain Jewish quarters” were “giving crap” about MP Andy McDonald, who was suspended by Labour after he used the phrase “between the river and the sea” in a speech during a rally.
He is also reported to have claimed Israel planned to “get rid of [Palestinians] from Gaza” and “grab” some of the land.
Labour had come under serious pressure to disown Mr Ali after his initial comments emerged, with party figures and opposition MPs siezing on the remarks.
But the party publicly stood by their candidate, with shadow minister Nick Thomas-Symonds insisting it would be “unfair” to conclude there is a problem with Labour in Rochdale, adding that Mr Ali had simply “fallen for an online conspiracy theory”.
John Mann, the government’s independent adviser on antisemitism, said Sir Keir should sack the advisers who handled Mr Ali’s case.
The former Labour MP said: “ Those people have failed to get their act together, they’ve created a mess.”
And Lord Mann told LBC the scandal has left “the poor people of Rochdale” with an invidious choice in the contest.
The candidates remaining include ex-Labour MP Simon Danczuk, who was suspended from the party for exchanging sexually explicit text messages with a teenager, and divisive former Labour MP George Galloway.
He also claimed there had been “a transformation” in the Labour Party’s handling of antisemitism under Sir Keir.
Sir Keir has sought to move his party on from the Corbyn era, during which the party was dogged by complaints over its handling of antisemitism in the party.
The leadership is now being pressed on why Mr Ali had not been immediately suspended after the comments emerged.
Labour recently suspended the MP Kate Osamor after she appeared to say the Gaza war should be remembered as genocide on Holocaust Memorial Day.
Labour’s national campaign coordinator Pat McFadden told broadcasters the party acted because “new information and more comments have come to light which meant that we had to look at this situation again”.
But the author of a report into Labour under former leader Jeremy Corbyn, which found the left and right of the party weaponised antisemitism, said there was a disparity in how disciplinary cases are treated.
Martin Forde KC said: “This was a very inflammatory thing (for Mr Ali) to say. That there is some complicity to justify retaliatory attacks was clearly antisemitic.”
And Mr Forde said Labour MPs Ms Osamor and Diane Abbott both apologised immediately after they were accused of antisemitism, but "things seemed to drag on in terms of disciplining certain elements of the party, and be dealt with swiftly in others".
“Now that’s the perception, I can’t quantify it, but I do think it’s something that leadership should be concerned to, in a away, dilute, or if it is in fact the case, they need to give reassurance to members of the voting public and to their members that people will be treated fairly,” he told BBC Radio 4’s Today programme.
A Labour spokesperson said: “Keir Starmer has changed Labour so that it is unrecognisable from the party of 2019.
“We understand that these are highly unusual circumstances, but it is vital that any candidate put forward by Labour fully represents its aims and values.
“Given that nominations have now closed, Azhar Ali cannot be replaced as the candidate.”
The decision to withdraw backing for the candidate will come as a blow to the party, which had hoped to retain the seat following the death last month of sitting MP Sir Tony Lloyd.
Mr Ali, who is also a Lancashire County Councillor, apologised to the Jewish community and retracted his original remarks, which he described as “deeply offensive, ignorant and false”.
The decision to withdraw support for the candidate came the same day that shadow minister Nick Thomas-Symonds said Mr Ali had fallen “for an online conspiracy theory” and insisted Labour would “continue this campaign in Rochdale”.
Frontbenchers Lisa Nandy and Anneliese Dodds had been out campaigning for Mr Ali in the constituency at the weekend, though Ms Dodds had campaigned for Mr Ali on Saturday morning, before the comments came to light.
Rishi Sunak, speaking to GB News viewers on Monday at an event in County Durham, said it was a “con” to suggest Labour has been reformed.
He said: “Keir Starmer has been running around for the last year trying to tell everybody ‘Okay, Labour Party’s changed’. Well, look what just happened in Rochdale.”
He accused Sir Keir of having “stood by and sent cabinet ministers to support him, until literally five minutes before I walked on tonight, under enormous media pressure, has decided to change his mind on principle”.
“No principles at all,” he added.
Labour’s decision will add considerable uncertainty to the outcome of the by-election when voters go to the polls at the end of the month.
Mr Danczuk is standing as the candidate for Nigel Farage’s Reform Party and Mr Galloway, of the Workers Party of Britain, is campaigning against Labour’s stance on Gaza.
About 20 per cent of the electorate and 30 per cent of the population of the town are Asian, with polls nationally suggesting Labour’s vote could be hit by Asian people unhappy with the party over Palestine and its perceived support for Israel.
If elected, Mr Ali will sit as an independent MP and will not receive the party whip. The decision means that Labour will also need to find a new candidate to contest the seat at the upcoming general election.
A spokesperson for Campaign Against Antisemitism said: “Sir Keir Starmer has blotted an otherwise fairly admirable copybook and given the public reason to doubt the earnestness of his promise to tear antisemitism out ‘by its roots’ in Labour.
“People will have to judge for themselves whether the additional reported comments by Azhar Ali are really any worse than the comments that had already been reported.
“Rather than appearing as a principled decision, Labour’s withdrawal of support for its candidate at this late stage just looks as expedient as the failed attempt to defend him. It is the worst of all worlds for Labour.”