Labour has declined to endorse a controversial candidate who suggested that last year’s Manchester Arena bombing may not have occurred, in effect removing her as a prospective MP.

The decision over Mandy Richards was made after an emergency meeting of the party’s ruling body on Tuesday night.

Richards, selected as the party’s candidate for Worcester last week, had claimed on her Twitter account there were “no images … of physical damage” from the bombing last May, and also said there was a “convenient shortage of evidence” in the murder of the MP Jo Cox.

A panel from Labour’s national executive committee – including Unite union’s national officer, Jim Kennedy, the GMB union’s national political officer, Cath Speight, and the Islington councillor Claudia Webbe – called Richards to an emergency meeting to explain herself, the Guardian understands. The decision has been taken not to endorse her candidacy.

The NEC has the power to remove a candidate if he or she has concealed anything that might be likely to bring the party into disrepute. Richards allegedly did not fill in the form correctly, nor did the selection committee question her about her social media history.

Richards has been subjected to two extended civil restraint orders by the high court. These orders prevent her from making fresh applications in relation to those particular proceedings. She is reported to have made “false and vexatious claims” against MI5 and MI6 and a long list of others, including her GP and Thames Water.

The shadow home secretary, Diane Abbott, was called to give evidence in a separate election petition hearing at the high court, involving Richards’ challenge to her failure to be elected in the London elections of 2106, where she said Richards was an “obsessive” whose claims “cannot be true”.

Questions are likely to be asked about how Richards passed the selection process, having previously been shortlisted for another target seat in Telford several weeks earlier.

Applicants are explicitly asked in the application form and by the interview panel to disclose anything in their background, personal, political or financial, past or present, which could have any potential to embarrass either themselves or the party.

Richards was told by the panel she had broken the rules when she did not disclose any information in response to that question in the application form or interview. The panel decided that was a “lack of judgment that is not compatible with the high standards the party expect of candidates and elected representatives”.

Richards has said she is a supporter of Jeremy Corbyn, but sources at Momentum, the grassroots leftwing movement, have insisted it does not back her, and said they did not back any candidate in the seat, which has a 2,500 Conservative majority.

A source close to the NEC said the committee had decided to take swift action. “The panel is people from right across the political spectrum,” the source said.

Kennedy and Webbe are key allies of Corbyn on the committee. “This is not a factional decision but a unanimous one that no one else on the NEC would block,” the source said. “There will be plenty of others now who want to contest that seat.”

On Tuesday night, members of the local Worcester party’s committee met to discuss the selection, agreeing to back the NEC’s decision.

Speaking after the decision, Richards said she was disappointed but understood the NEC’s decision, which was the result of “adverse publicity” over the past few days.

“It has not, however, dampened my resolve or passion for politics,” she said. “It is unfortunate that the misrepresentation of the circumstances leading up to my selection were allowed to gain traction.”

Richards said she had not stated that the Manchester attack and Cox’s death were staged, despite tweets questioning both events.

“I would never seek to offend the victims and the bereaved in these incidents, that would be entirely contrary to my motivation,” she said.

She hinted that those who had opposed her candidacy were politically motivated, saying that individuals had “unfairly seized on an opportunity to distort my intention to further their own ambition at the expense of mine … they will need to wrestle with their consciences on that in due course. The conceit, however, will not remain unanswered.”

Richards said she wanted to apologise to the people of Worcester. “Your standing ovation at the hustings meeting has left me with the most heartwarming memory of my brief time with you,” she said.

“I hope you find another formidable women to take up the mantle for we are aplenty.”