Labour’s decision to nominate Shami Chakrabarti, the human rights and civil liberties campaigner, for a peerage has caused tensions at the top of the party.

Jeremy Corbyn put Chakrabarti forward for a peerage, saying she shared his ambition for reform of the House of Lords and praised her career of public service.

She has recently completed an inquiry into antisemitism for the party.

However, a number of Labour MPs criticised the party leader’s decision to nominate her, given the row over cronyism engulfing David Cameron and No 10.

Wes Streeting, Labour MP for Ilford North, said: “With just one Lords appointment, Corbyn has undermined criticism of Cameron’s list and the remaining credibility of his antisemitism inquiry.”

Tom Watson, the Labour deputy leader, is understood not to have been consulted about the choice and believes the party should be boycotting the whole system.

The Board of Deputies of British Jews, the leading group representing the Jewish community, also criticised the decision, as it was not happy with the antisemitism report. Marie van der Zyl, its vice-president, said: “It is beyond disappointing that Shami Chakrabarti has been offered, and accepted, a peerage from Labour following her so-called ‘independent’ inquiry.

“The report, which was weak in several areas, now seems to have been rewarded with an honour. This ‘whitewash for peerages’ is a scandal that surely raises serious questions about the integrity of Ms Chakrabarti, her inquiry and the Labour leadership.”

Others criticised Corbyn for deciding to nominate a peer after having said last year that he saw no reason to recommend any when the system needed reform. However, it is understood he has since felt the need to keep up the party’s numbers in the Lords as much as possible, especially since Cameron has nominated 13 peers.

Asked about the criticism, a Corbyn spokesperson said in a statement: “Shami Chakrabarti shares Jeremy’s ambition for reform of the House of Lords. Her career has been one of public service and human rights advocacy.

“Her legal and campaigning skills, and the trust that she has gained from many ordinary Britons, will be a considerable asset to the House of Lords. Brexit will put many hard-fought rights at risk, so it is crucial that those equipped with the right skills are given the opportunity to hold this government to account.”

Chakrabarti said: “I am honoured to accept Jeremy Corbyn’s challenge and the opportunity to help hold the government to account. This is a dangerous moment for our country and we share vital human rights values that need defending more than ever before in my lifetime.”

Chakrabarti, former director of the rights group Liberty, was awarded a CBE in 2007, chosen to be one of eight Olympic flag bearers at the London Games of 2012 and served on the Leveson inquiry into the British press and phone hacking.

She is the chancellor of the University of Essex, was previously chancellor of Oxford Brookes University and holds honorary professorships in the law departments of Manchester University and the London School of Economics.