Labour has dropped its inquiry into Dame Margaret Hodge despite her refusal to apologise over a confrontation with Jeremy Corbyn about anti-Semitism.
Dame Margaret tweeted she was pleased the party had scrapped any action but added neither side had apologised.
Journalists were briefed the decision had been taken after she expressed “regret” to Labour chief whip Nick Brown for her conduct.
Dame Margaret hit back, insisting she had done no such thing.
A strongly-worded response from her lawyers to Labour general secretary Jennie Formby said that although the “decision is welcomed, the basis on which you seek to explain your belated volte face is entirely disingenuous”.
The letter said Dame Margaret “did not express regret” and that was a misrepresentation in order to “save face in your necessary climb down”.
The investigation was launched after a heated exchange last month in which Dame Margaret was said to have called Mr Corbyn an “anti-Semite” and a “racist”.
Mr Corbyn has been criticised by Jewish community leaders and some of his own MPs over what they see as his refusal to take allegations of anti-Semitism in the party seriously enough.
It centres on the Labour Party’s code of conduct – which includes an internationally recognised definition of anti-Semitism but omits four of the 11 examples of “contemporary anti-Semitism”.
Labour says it has “expanded and contextualised” the International Holocaust Remembrance Alliance examples to provide “legally sound guidelines that a political party can apply to disciplinary cases”.
And Mr Corbyn has insisted anti-Semites have no place in the Labour Party and acknowledged the party has not been quick enough to deal with those who have spread “poison” in the party’s name.
Labour MP Ian Austin is still facing disciplinary action from Labour over claims – denied by him – that he screamed abuse during a row over the code of conduct. He has called the new code of conduct a “disgrace”.
Mr Corbyn, a long-standing supporter of the rights of Palestinians, has defended Labour’s decision not to include one of the IHRA examples – which warns against “claiming that the existence of a State of Israel is a racist endeavour”.
He said this had “sometimes been used by those wanting to restrict criticism of Israel that is not anti-Semitic”
Some Labour figures, including the shadow defence secretary Nia Griffith, had called for the investigation into Dame Margaret to be dropped – and shadow chancellor John McDonnell said Labour needed to “move on”.
Dame Margaret previously said she had chosen to confront Mr Corbyn in anger at what she said was the party’s “arrogance” over its new code of conduct on anti-Semitism.
She accused Labour of “playing around” with the international definition, and said she had gone to tell Mr Corbyn he was “perceived as being anti-Semitic”. She denied reports she had sworn at him.