Labour’s National Executive Committee is planning to launch a new inquiry into allegations of antisemitism against Ken Livingstone after MPs reacted furiously to information from party insiders who said he was likely to be readmitted to the party within weeks.

After a day of confusion in the high command, Labour officials said that an NEC inquiry first announced ten months ago by Jeremy Corbyn, but never begun, would probably be opened next month – just weeks before the former London mayor’s two-year suspension is due to end on 27 April. The about-turn by Labour came after the Observer contacted party sources on Friday and was told in repeated exchanges that no further action was in the pipeline and that the former London mayor was likely be allowed back in as a full member. When this was reported on Guardian.co.uk there was a furious reaction from Labour MPs and members.

Five hours later, the party changed its line and said it would be inaccurate to suggest either that no further investigation was planned or that Livingstone was on course to be readmitted. It said the NEC would probably begin looking at uninvestigated claims against him next month.

Livingstone was initially suspended in April 2016 following controversial comments during a BBC interview in which he said that Hitler supported Zionism in the 1930s.

After a full inquiry by the party’s National Constitutional Committee, which concluded last April, the former mayor was suspended for a further year for bringing the party into disrepute. He was also criticised for defending the Labour MP Naz Shah over an antisemitic Facebook post for which she subsequently apologised.

But his unrepentant tone after the NCC hearing caused such anger that Corbyn announced at once that an NEC inquiry would take place. There has been no further action to date.

The flurry of mixed signals infuriated Labour MPs, who are demanding that the party show zero tolerance to antisemitism. Wes Streeting, chair of the all-party parliamentary group on British Jews, said any suggestion that Livingstone might return would cause “irreparable damage to the party’s standing and reputation”.

Another MP, Ruth Smeeth, the parliamentary Labour party vice-chair, who has suffered antisemitic abuse on social media, said Livingstone “continues to bring the party into disrepute” and “has no place in the party”. MPs had feared that Livingstone’s readmission was more evidence of the left gaining a stranglehold over the party after the announcement on Friday that the longstanding general secretary Iain McNicol was leaving the role. McNicol, regarded as a moderate, had an uneasy relationship with Corbyn’s office and is now expected to be replaced by a leftwinger.

Labour sources said that there were suggestions McNicol might be offered a peerage for services to the party. Livingstone told the Observer on Thursday that the matter was “dead” and he was not going to be expelled because he had done nothing wrong. If he were thrown out of the party, he would take legal action against the party. He also claimed that the entire controversy was a “fake news” story cooked up by the media.

“I did not say Hitler was a Zionist,” the former mayor said. “And that was why I was suspended. That is just the problem of our fake news these days. It is all over the bloody world. But nobody bothers to check these days. They just repeat the crap.”

He added: “What I referred was an agreement between German Zionists and the Nazi government in 1933 [the so-called Haavara agreement] and you can’t expel someone for stating historical fact when you have done nothing about those Labour MPs screaming that I was a Nazi apologist and all that garbage.”

Livingstone said he believed the party had consulted its own lawyers, who had made clear it would lose any legal case against him.

Labour MPs, he claimed, had turned on him not because they thought he was antisemitic but because he supported Corbyn: “Basically it wasn’t about antisemitism. It was about the fact that I was out defending Jeremy saying he could win the next election. The vast majority of Labour MPs thought I was completely mad.”

Other Labour sources said the Livingstone case was due to be discussed at the party’s disputes panel in March, though this might conclude that no further action would be taken.

Livingstone said the hearing would be “more fairly run” than previous ones, because the new chair of the disputes panel is Momentum-backed Christine Shawcroft. Momentum-supporting members of the NEC voted 22 to 15 in January to oust Ann Black, the longstanding chair of the disputes subcommittee, and replace her with Shawcroft, a veteran leftwinger.