Labour has dropped its investigation into Dame Margaret Hodge amid accusations the probe was fuelling the damaging antisemitism row engulfing the party.

No further action will be taken against the senior backbencher in relation to reports she confronted and shouted at Jeremy Corbyn over anti-Jewish abuse, The Independent has been told.

The ex-minister, who is herself Jewish and lost family members in the Holocaust, faced the probe because of an altercation following an angry party meeting on antisemitism.

A source said Dame Margaret had expressed regret to Labour’s chief whip, Nick Brown, “for the manner in which she raised her views”.

As a result, Labour’s general secretary, Jennie Formby, has written to her to inform her that no further action would be taken.

The MP had already been reprimanded by Mr Brown.

Responding to news that the investigation will be dropped, Dame Margaret said: “I’m pleased that the Labour Party has finally dropped their ‘action’ against me. After 55 years of LP membersship, going after me instead of addressing the issue was wrong.

“In 2018 antisemitism has again reared its ugly head and the campaign against it goes on.”

She thanked supporters for their messages, “which have kept me going”, but insisted: “Just to be clear: there have been no apologies – on either side.”

The investigation was opened after a row between the Labour grandee and Mr Corbyn in Parliament, during which Dame Margaret accused her party leader of being a “racist and anti-Semite” and said he did not want “people like me” in the Labour Party.

It followed Labour’s decision not to adopt in full the internationally-recognised International Holocaust Remembrance Alliance (IHRA) definition of antisemitism - a move that was widely criticised by Jewish groups and Labour MPs alike.

Mr Corbyn’s spokesman told reporters “action will be taken” in relation to the outburst and Dame Margaret received a letter the day after the incident notifying her that she was under investigation by Ms Formby.

Protests against Labour antisemitism Show all 14 1 /14 Protests against Labour antisemitism Protests against Labour antisemitism Protesters clashed during the demonstration Reuters Protests against Labour antisemitism Members of the Jewish community hold a protest against Labour party leader Jeremy Corbyn and antisemitism in the Labour Party AFP/Getty Protests against Labour antisemitism Protesters hold placards and flags during a demonstration, organised by the British Board of Jewish Deputies for those who oppose antisemitism, in Parliament Square Reuters Protests against Labour antisemitism Hundreds of people gathered in Parliament Square to protest against antisemitism in the Labour Party EPA Protests against Labour antisemitism Labour MP Luciana Berger speaks during the protest PA Protests against Labour antisemitism A protester blows through a shofar during the demonstration Getty Protests against Labour antisemitism Members of London's Jewish community protest in support of Labour leader Jeremy Corbyn outside parliament EPA Protests against Labour antisemitism Labour MP John Mann speaks during a protest against antisemitism PA Protests against Labour antisemitism People protest against antisemitism in the Labour Party as Jewish community leaders have launched a scathing attack on Jeremy Corbyn, claiming he has sided with antisemites ‘again and again’ PA Protests against Labour antisemitism Labour politicians Stella Creasy and Chuka Umunna leave after attending the demonstration Getty Protests against Labour antisemitism A pro-Jeremy Corbyn protester holds a placard during a counter-protest Getty Protests against Labour antisemitism A support of the Labour Party hold up a placard during the demonstration Reuters Protests against Labour antisemitism Jeremy Corbyn supporters during the demo Reuters Protests against Labour antisemitism A protester holds up a sign reading ‘For the many, not the Jew’ AFP

The Labour leadership had come under mounting pressure to drop the probe, with John McDonnell, the shadow chancellor, and Momentum founder Jon Lansman joining numerous Labour MPs in criticising the decision to open an inquiry.

Dame Margaret last week published a heated exchange of letters between her lawyers and Ms Formby, in which her representatives threatened to take the Labour Party to court if the investigation continued.

In a strongly worded letter, they wrote: "In the event that you take the misguided step of continuing with this investigation, we would expect any further steps to comply with principles of natural justice and fairness.

"We will be monitoring this, and reserve all of our client's rights to refer this matter to Court under the contractual relationship between our client and the Party, and the obligations (express and implied) which follow from this."

The MP, who has spoken of having lost relatives in the Holocaust, used a parliamentary debate earlier this year to recount antisemitic abuse she had received.

Jeremy Corbyn releases video apologising for antisemitism in the Labour party

In their latest letter to Ms Formby, her lawyers raised a series of concerns about the nature of the investigation, including asking why the MP had been asked to apologise before the supposedly "fair" investigation found she had committed any wrongdoing.

In a letter suggesting the investigation would be "brought to an end" if Dame Margaret apologised for her actions, Ms Formby said: "We are currently at the beginning of the process. Nobody has prejudged the outcomes, nor is there any improper motive for the investigation."

In response, Dame Margaret's lawyers wrote: "You claim that your investigation has not been pre-judged and that under the Labour Party Rules a fair process can still be followed, but that investigation would be dropped if our client apologises.