Labour has been placed under formal investigation by the equalities watchdog over whether the party has unlawfully discriminated against, harassed or victimised people because they are Jewish.

The Equality and Human Rights Commission (EHRC) said it was launching an official inquiry under section 20 of the Equality Act 2006 after carrying out preliminary investigations since March.

It will seek to determine whether the party and its employees have committed unlawful acts of discrimination or failed to respond to complaints of unlawful acts in an efficient and effective manner.

The regulator’s announcement followed legal complaints made last year by the Campaign Against Antisemitism (CAA) and the Jewish Labour Movement, which both argued the party was not compliant with equalities law.

The EHRC has only rarely taken action against political parties before. In 2010, it ordered the British National party (BNP) to rewrite its constitution to comply with race relations laws because the party had banned black and minority ethnic Britons from becoming members.

The inquiry will reopen the controversy over Labour’s handling of antisemitism complaints amid accusations that party staff working in Jeremy Corbyn’s office had intervened in individual cases.

A Labour spokeswoman said the party “is fully committed to the support, defence and celebration of the Jewish community and is implacably opposed to antisemitism in any form”.

She said the party rejected any suggestion it had not handled antisemitism complaints fairly and robustly, or that it had acted unlawfully, but it would cooperate fully with the EHRC.

“We support the efforts of the EHRC to draw attention to the obligations all political parties have under the Equality Act. But its ability to do so has been undermined by a 70% budget cut since 2010. Labour is the party of equality and in government we will strengthen the powers and functions of the commission,” the spokeswoman said.

She said there had been a worrying rise in antisemitism in the UK and across Europe, and Labour was working to remove it from the party by strengthening rules and procedures.

“But the issue can only be properly dealt with by all political parties working together to protect the interests of the Jewish community and to combat racism in politics, the media and in society more broadly,” the spokeswoman added. “That includes the need for the Conservatives and other parties taking action to deal with racism in their own ranks.”

Gideon Falter, the CAA’s chief executive, said there were two reasons the EHRC had taken such an “extraordinary step”.

“The first is that the Labour party has repeatedly failed to address its own antisemitism problem,” he said. “The second is that when the commission approached the Labour leadership, they still failed to offer action sufficient to reassure the commission that the antisemitic discrimination and victimisation would stop.”

He claimed the leader, Jeremy Corbyn, the general secretary, Jennie Formby, and Labour’s national executive committee had refused to listen to British Jews, Labour MPs, MEPs, councillors and activists who had quit the party because it “has now become a home for hatred in British politics”.

“In just four chilling years, Jeremy Corbyn has turned the party which pioneered anti-racism into the party that now finds itself in the company of the BNP, being investigated by the very equality and human rights regulator it once fought so hard to establish,” he said.

“Over the course of his leadership, we have seen enough to convince us that Jeremy Corbyn himself is an antisemite and unfit for any public office, and though few have acted, most Labour MPs seem to agree with us.”