The Labour Party is being accused of 'failing the Jewish community' after it did not expel Ken Livingstone for comments he made linking Adolf Hitler to Zionism.

Livingstone, former Mayor of London, was suspended for two years from the party on Tuesday for saying Hitler supported Zionism when he was elected in 1932 before 'he went mad and ended up killing six million Jews'.

The Chief Rabbi said the decision not to expel him fully 'yet again failed to show' the party was 'sufficiently serious about tackling the scourge of anti-Semitism'.

But Livingstone has said he will fight to overturn the ban.

Tom Watson, Labour's deputy leader, also attacked the internal party ruling and said he 'can't disagree' with the Chief Rabbi.

Commenting on social media he said Livingstone 'discredits the party I love' and he was 'ashamed that we have allowed Livingstone to cause such distress'.

Labour's internal disciplinary panel upheld three charges against the former mayor and said he contravened the rule that 'no member of the party shall engage in conduct which in the opinion of the NEC is prejudicial, or in any act which in the opinion of the NEC is grossly detrimental to the party'.

But it stopped short of expelling him and simply barred him from standing for office or representing the party at any level for two years.

Jeremy Newark, chair of the Jewish Labour Movement, said the ban was 'quite insufficient'.

He said: 'It seems the party is operating some kind of revolving door policy where one can make deeply hurtful and offensive comments, denies the history of the Holocaust, and dip in and out of party membership.

'It's a betrayal of the values of our party and what it stands for.

'I feel they've fudged an incredibly important and significant decision, a moment that could have been a turning point for the Labour Party in proving that it has zero tolerance for anti-Semitism appears to have been wasted.'

Joe Glasman, head of political and government investigations at Campaign Against Antisemitism, said: 'Ken Livingstone has been portraying Jews as Nazis for decades. His claim that Hitler acted in support of Zionism, along with his constant repetition of that distortion, has been a repulsive spectacle.

'We felt sure that the Labour Party, blighted by antisemitism as it is, would reclaim some of its former self and expel him. Labour has long had a moral duty to expel Ken Livingstone, but instead it has allowed his vile views to gain support in the Party.

'Today's verdict confirms our worst fears: that it is possible to husband and broadcast such repellant beliefs and still remain a Labour Party member has shocked even us. This surely represents the last of the death throes of the Labour Party's long relationship with the Jewish community. The Labour Party had this one last chance to prove that it is not beyond salvation. Today's decision is the Party's final act of brazen, painful betrayal.'

But Labour's shadow attorney general Shami Chakrabarti, who led an inquiry into accusations of antisemitism in Labour said the party had 'showed its ability to look at itself fairly and carefully in the mirror in more difficult times, however painful this might be.'

She added: 'I hope people might now revisit my report and remind themselves of better ways to argue about difficult issues without compromising our values of solidarity, tolerance and respect.'