Christine Shawcroft, the chair of Labour’s internal disputes panel, has resigned after a leaked email revealed she lent support to a council candidate suspended for alleged antisemitism.

Alan Bull, who was selected to stand in Peterborough, was suspended by Labour last week after he was linked to a series of antisemitic social media posts.

He was accused of sharing on Facebook an article headlined, “International Red Cross report confirms the Holocaust of 6m Jews is a hoax”, illustrated with a photograph of the gates of the Auschwitz concentration camp.

The Daily Mail obtained an email sent by Shawcroft to leftwing allies on Labour’s ruling national executive committee (NEC) last weekend – with the party already engulfed in an antisemitism row – in which she called for Bull’s suspension to be lifted so he could stand in May’s local elections.

Shawcroft claims in the email that “elements of Peterborough Labour party” have “political reasons” for wanting Bull suspended; and the Facebook post for which he was suspended has been “taken completely out of context”.

After the email was leaked, Shawcroft announced that she would step down as chair of the party’s disputes panel, which oversees internal disciplinary cases; but she did not say whether she intended to remain on the NEC.

“I sent this email before being aware of the full information about this case and I had not been shown the image of his abhorrent Facebook post,” she said.

“This week we have seen a clear expression of the pain and hurt that has been caused to Jewish members of our party and the wider Jewish community by antisemitic abuse and language, and by the reality of antisemitism being denied and downplayed by others.

“In light of this, I have decided to stand down as chair of the disputes panel to ensure my wrong and misguided questions on this case do not cause doubt or anxiety about our processes”.

Shawcroft only took on the role in January, after her predecessor, Ann Black, was ousted in a show of strength by NEC leftwingers, who have been in the majority since the latest set of NEC elections.

She is a director of Momentum, the pro-Corbyn campaign group. Her resignation will pile the pressure on him over the issue of whether Labour is taking claims of antisemitism seriously enough.

Jewish groups marched on Westminster on Monday to send a message to the Labour leadership that, “enough is enough”, after Corbyn was forced to apologise for defending the artist of an antisemitic mural.

Richard Angell, of centre-left Labour group Progress, said, “Christine Shawcroft’s defence of a known Holocaust denier is disgusting. Resigning from the disputes panel is a sop. She is not fit to be a member of our party, let alone continue as a member of the NEC.”

Bull was suspended last week and forced to withdraw as a candidate, after complaints and months of pressure from two other party members, Richard Ferris and Matthew Mahabadi.

When there was no action after their first complaints, in November, Ferris and Mahabadi, who are both councillors, announced they would not share a platform with Bull because of his views. Last week they refused to campaign with him, and the Jewish Chronicle picked up the story. Bull was suspended the following day.

Earlier this week, both councillors were called before their council group to face a disciplinary hearing because there had been “a large number of complaints” about their conduct. They have not yet heard the result.

In an article the two councillors wrote for the New Statesman, Ferris and Mahabadi said: “Antisemitism is a vile evil – you should not have to be Jewish to say so or be offended by it because it is a scar in our society that damages each and every one of us. We, as Labour councillors, will not stand for it.

“It is time everyone in the Labour party said the same, acted accordingly and if they cannot, leave.”