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Veteran Labour MP Frank Field has quit the party's group in Parliament, saying the leadership has become "a force for anti-Semitism in British politics".
The Birkenhead MP also blamed a "culture of intolerance, nastiness and intimidation" in local parties.
A month ago he lost a confidence vote in his constituency party, after siding with the government in Brexit votes.
Jeremy Corbyn has apologised for hurt caused by anti-Semitism in the party and pledged to stamp it out.
Mr Field, a Eurosceptic who is among a handful of Labour MPs to back the government in some Brexit votes, says he will remain as a member of the party but will sit as an independent Labour MP, who will not be subject to the parliamentary party's disciplinary procedures.
In a letter to chief whip Nick Brown, he said the anti-Semitism row in the party was reason enough to resign, suggesting the leadership was "becoming a force for anti-Semitism in British politics".
"Britain fought the Second World War to banish these views from our politics, but that superhuman effort and success is now under huge and sustained internal attack," he wrote.
"The leadership is doing nothing substantive to address this erosion of our core values. It saddens me that we are increasingly seen as a racist party."
Mr Field has been a Labour MP since 1979 and is a specialist on welfare issues.
In July, Mr Field lost a confidence vote by his constituency party after voting with the government over Brexit plans.
In his letter to Nick Brown, Mr Field complained that intimidation and intolerance were now "sadly manifest within my own Constituency Labour Party" and referred to a complaint he had made "on a specific bullying issue" going back 18 months that, he said, "no decisive action" had been taken on.
He said he intended to remain MP for Birkenhead, as an independent Labour MP, adding: "Few events would give me greater pleasure than to apply to the Parliamentary Labour Party for the whip. But great changes in the leadership's stance on the issues outlined in this letter will need to take place before I will be able to do so."