After a party source seemed to attribute a predicted defeat in the West Midlands mayoral election to Hamas supporters, Labour found itself mired in an internal racism dispute.

Following the appearance of an insider comment, MPs responded strongly, declaring that "the Middle East, not West Midlands," will be responsible for a Tory victory.

Backbenchers criticised the comments for linking Muslim voters to Hamas, and the Labour Party eventually withdrew its support for the "racist" remark.

The dispute started when a West Midlands-based Labour source projected that the party's nominee, Richard Parker, would be defeated by the incumbent Tory, Andy Street.

“It’s the Middle East, not West Midlands that will have won Street the mayoralty. Once again, Hamas are the real villains,” the source told BBC Midlands Today.

The prediction, made before a vote had been counted, was seen by Labour HQ as an attempt by local members to pre-emptively shift the blame onto them.

Birmingham council, which is Labour run, has been forced to slash services and increase council tax by 21 per cent after it was effectively declared bankrupt last year.

The insider’s quote sparked anger among Labour MPs, who said it was wrong to imply that voters who abandoned the party over its stance on Gaza were extremists.

Bell Ribeiro-Addy, the MP for Streatham, said: “This is a disgusting way to talk about Muslim voters, conflating them with Hamas and treating them as a monolith. It reeks of racism and entitlement. Such comments should have no place in the Labour Party.”

Zarah Sultana, the MP for Coventry South, added: “Once again, I’m deeply disturbed by Islamophobic quotes given to the media by ‘Labour sources’.

“When politicians are confronted with racist bile, it should be immediately condemned. As a party we need to listen to and acknowledge concerns, not hold British Muslims in contempt.”

Tahir Ali, the MP for Birmingham Hall Green, said the remark was “vile racism” and that “treating voters with such a lack of respect is deplorable and should not be tolerated”.

“Such anti-Muslim bigotry will only serve to alienate a community that has long supported Labour in its efforts to transform this country for the better,” he added.

Following the backlash, Labour HQ distanced itself from the anonymous quote and insisted it did not represent the party’s views.

A spokesman said: “The Labour party has strongly condemned this racist quote, which has not come from anyone who is speaking on behalf of the party or whose values are welcome in the party.”

The row put a dampener on Sir Keir Starmer’s day as he celebrated a series of thumping victories over the Conservatives in council elections.

Across the country, Labour secured a swing that would be enough to comfortably propel it into power if replicated at the general election later this year, but evidence emerged that Muslim voters were deserting the party over its stance on Gaza as it suffered in areas such as Oldham and Bolton.