Labour has dropped its complaint against the Daily Mail over its coverage of Jeremy Corbyn's visit to the cemetery where terror leaders linked to the Munich massacre are buried.

The party complained to the Press regulator in August about several papers' coverage of the 2014 event.

Last night it emerged it had told the Independent Press Standards Organisation that it did not wish to take the case against the Mail any further.

Mr Corbyn holding a wreath only feet away from the graves of terror leaders linked to the 1972 killings

The decision will be seen as a vindication for the Mail's original story, which concerned a photo, obtained by this paper, of Mr Corbyn holding a wreath only feet away from the graves of terror leaders linked to the 1972 killings.

The picture was among a number taken during a service to honour Palestinian 'martyrs'.

Buried in the cemetery in Tunisia are members of Black September, the terror group which massacred 11 Israeli athletes.

One picture placed Mr Corbyn close to the grave of another terrorist, Atef Bseiso, intelligence chief of the Palestine Liberation Organisation. Bseiso has also been linked to the Munich atrocity and was assassinated in Paris in 1992.

Labour insisted Mr Corbyn had been at the cemetery to commemorate 47 Palestinians killed in an Israeli air strike on a Tunisian PLO base in 1985.

But the Mail found that the monument to the air strike victims is 15 yards from where Mr Corbyn is pictured – and in a different part of the complex. Instead he was in front of a plaque beside the graves of Black September members.

For two days, Labour continued to insist that Mr Corbyn had attended a service to commemorate the 1985 victims.

But Mr Corbyn then went on TV where he appeared to admit being present at a wreath-laying for Palestinian terrorists. Mr Corbyn said: 'A wreath was indeed laid by some of those who attended the conference to those that were killed in Paris in 1992.

'I was present when it was laid. I don't think I was actually involved in it. I was there because I wanted to see a fitting memorial to everyone who has died in every terrorist incident everywhere because we have to end it.'

Less than six hours later, the Labour leader's office put out a further statement, this time with an unequivocal denial that Mr Corbyn had laid a wreath at the graves of those linked to the Munich Massacre.

Later that week, Labour made a formal complaint against the Times, the Sun, the Mail, the Telegraph, the Express and Metro. According to a story in The Guardian, it told Ipso that several papers had misrepresented the event which the Labour leader attended.

Last night a spokesman for the Labour Party said: 'Our view remains that the reporting we complained about seriously misrepresented the nature of what took place, those buried in the cemetery and the mainstream Palestinian leaders conducting the ceremony, and these inaccuracies breached the Ipso code.

'Regrettably, confidential communication with Ipso was leaked and it was unable to trace the source or assure us it would not recur, and we considered that the complaints process was unacceptably compromised. We therefore decided we would not be taking this Ipso complaint any further.'

Mr Corbyn still faces an investigation into why he failed to register the Tunisian trip with the Parliamentary authorities. Labour says the trip was not declared in the Register of Members' Interests because the costs fell below the threshold for declarations, which was then £660.

Mr Corbyn did not declare the trip despite staying at the five-star Le Palace hotel. Critics said it was 'inconceivable' that the stay plus flights could have cost less than £660.