UPDATE: Labour has now suspended Livingstone

Labour's anti-Semitism scandal has worsened after the former mayor of London, Ken Livingstone, accused the "Israel lobby" of attempting to smear the state's critics, just a day after Bradford West MP Naz Shah was suspended by the party for backing a call to relocate Israelis to the United States.

"Her remarks were over the top but she's not anti-Semitic. I've been in the Labour party for 47 years; I've never heard anyone say anything anti-Semitic," Livingstone told BBC Radio London.

He added: "There's been a very well-orchestrated campaign by the Israel lobby to smear anybody who criticises Israeli policy as anti-Semitic. I had to put up with 35 years of this.

"Frankly, there's been an attempt to smear Jeremy Corbyn and his associates as anti-Semitic from the moment he became leader. The simple fact is we have the right to criticise what is one of the most brutal regimes going in the way it treats the Palestinians."

The 70-year-old, who repeatedly clashed with Tony Blair over the Iraq War, also claimed Nazi leader Adolf Hitler was a supporter of Zionism, the movement to create a Jewish homeland.

"Let's remember when Hitler won his election in 1932, his policy then was that Jews should be moved to Israel," Livingstone said. "He was supporting Zionism – this before he went mad and ended up killing six million Jews."

The controversial interview has been met with indignation from Labour MPs, who have called on the party to suspend him. Sadiq Khan, the party's candidate for Mayor of London, described the comments as "appalling and inexcusable".

Wes Streeting, Labour MP for Ilford North, urged his parliamentary colleagues to speak out against anti-Semitism. "Decent Labour members need to decide how to respond to anti-Semitism within our ranks. Silence is complicity," he declared on social media site Twitter.

Gideon Falter, chairman of the Campaign Against Anti-Semitism, called on Labour to expel Livingstone. "He has claimed that Hitler was a Zionist and that anti-Semitism is not racism. Enough is enough," Falter said.

"He should not be suspended, he should be expelled today. He is a hardened politician who has spent his political career accommodating antisemitic extremists and making antisemitic gaffes.

"Jeremy Corbyn should understand that zero-tolerance for racism is all or nothing, and it is time for Ken Livingstone to be banished or for Corbyn to stop pretending to oppose racism."