Labour’s failure to expel Ken Livingstone “shames us all”, Tom Watson has said as he warned the decision could incite further distortions of the Holocaust in public discourse.

The deputy leader’s condemnation of the party’s “incomprehensible” verdict came after Ephraim Mirvis, the Chief Rabbi, accused the party of failing the Jewish community by not ejecting the former London Mayor over his remarks relating to Adolf Hitler and Zionism.

“This was a chance for the Labour Party to show that it would not tolerate willful and unapologetic baiting of the Jewish community, by shamefully using the Holocaust as a tool with which to inflict the maximum amount of offence,” he said.

Following an 11-month suspension, the party’s disciplinary panel made the decision to suspend Mr Livingstone from holding office in the Labour party for a further year after they found him guilty of bringing the party “into disrepute” over his provocative remarks last year.

But dozens of Labour MPs, Jewish groups and the Holocaust Educational Trust criticised what they described as a lenient punishment – referring to the suspension as a “slap on the wrist”.

In a statement Mr Watson added: “When I read the words of Chief Rabbi Mirvis, who says that ‘the Labour Party has failed the Jewish community, it has failed its members and it has failed all those who believe in zero-tolerance of anti-Semitism’, I can't disagree with him.

“I wish I could, but I can’t. I am ashamed that we have allowed Mr Livingstone to cause such distress.

“It isn’t just Jewish people who feel disgusted and offended by what Mr Livingstone said and by the way he has conducted himself over this matter, and it isn’t just Jewish Labour members who feel ashamed of any indulgence of his views anywhere in the Labour Party. This shames us all, and I’m deeply saddened by it.”

Mr Watson added that the former Mayor of London’s “unrepentant media appearances” in recent days have continued to discredit the Labour party.

“It is hard not to conclude that his use of inflammatory language to dismiss the fully justified outrage of the Jewish community and others will incite further distortions of the Holocaust in our public discourse,” he said.

“My party is not living up to its commitment to have a zero-tolerance approach to anti-Semitism. I will continue the fight to ensure that it does, and I will press my colleagues to do so too.”

Mr Livingstone said after the hearing: “Today’s Labour Party panel extended my suspension for another year because of my political views, not because I have done anything to harm the Labour Party.

Ken Livingstone suspended from Labour party for one more year

“The Labour Party’s disciplinary process was not in accord with natural justice in a number of ways. For example, the panel hearing was not held in public, despite the fact that it could have been under Labour’s rules. I was suspended for more than 11 months before the hearing was held.

“Scheduling the final day of this disciplinary hearing, on the day the Labour Party launched its campaign for the 4 May elections, was a supreme misjudgment by whoever planned this in the Labour Party headquarters.”

Livingstone: There was 'real collaboration' between Hitler & Zionists

Mr Livingstone, a supporter and old friend of Jeremy Corbyn, the Labour leader, has been a member of the party since 1969 but was previously exiled for four years after his decision to stand as an independent candidate for London mayor in 2000. He returned to the party four years later.