The so-called Hackney Heroine has accused the Liberal Democrat party of “underhand racism” and of holding “Neanderthal views on diversity”, as she announced her decision not to run as Party President.

In a video released on Facebook explaining why she is dropping her campaign, Pauline Pearce, also known as Lady P, said the party “wasn’t quite what I thought it was when it comes to diversities”.

Ms Pearce gained fame in 2011 when she was filmed shouting at rioters who had looted and destroyed local businesses in her area. Her expletive-filled rant was watched on YouTube over one million times and saw her become a figurehead for community issues after the unrest.

The footage launched her political career and in March she announced her intention to run as President for the Lib Dems. However, Ms Pearce claims she has been “ridiculed” over her past criminal conviction for smuggling cocaine in 1999, “patronised” by members of Nick Clegg's party and dismissed as not experienced enough.

Ms Pearce said: “I’ve been ridiculed for my past as an ex-convict, something that I was very open about from the day I was discovered in the media as the lady who ranted in the riots in 2011.

“Since running for president I’ve realised this party isn’t what I thought when it comes to diversities and being inclusive.

“People out there feel that they are diverse and feel that they are not at all racist, but it’s what I would call 'underhand racism', where you feel that people are not quite able to step up to the mark in chairing meetings."

However, Ms Pearce said she will remain as a member of the party and will now focus her efforts and community activism.

Her decision to quit the race has been met with dismay on Facebook, with one describing her standing in the election as “like a breath of fresh air”.

Another wrote: "A big loss to the Presidential Election. One of the reasons I rejoined the Party was the chance to vote for you. I hope you will continue to work for change both within the Party and wider communities."

The party said it is “saddened” to hear that Ms Pearce will no longer be standing.

A spokesperson for the Lib Dems said: "We are upset that Pauline feels she has been subjected to discrimination and prejudice, as this behaviour is the opposite of the values of equality and respect we embrace and pride ourselves on as a party.