Labour peer Lord Ahmed has been suspended by the party as it launched an investigation into claims he blamed a Jewish conspiracy for his jail term.
The Muslim peer was jailed for 12 weeks for dangerous driving in 2009 after sending and receiving text messages minutes before he was involved in a fatal crash.
He has now allegedly blamed the sentence on pressure placed on the courts by Jews "who own newspapers and TV channels".
The Muslim peer is said to have told an Urdu-language broadcast in Pakistan that the judge who jailed him was appointed to the High Court after helping a "Jewish colleague" of Tony Blair during an important case.
During the interview, Lord Ahmed apparently argued that he should have been sentenced by a magistrate.
"My case became more critical because I went to Gaza to support Palestinians. My Jewish friends who own newspapers and TV channels opposed this," he is alleged to have said.
The peer allegedly suggested High Court judge Mr Justice Wilkie was sent to pass his sentence because other judges refused.
Labour suspended him after the remarks were published in The Times and has launched an investigation.
A party spokesman said: "The Labour Party deplores and does not tolerate any form of anti-Semitism."
Born in Kashmir but raised in Rotherham, Lord Ahmed joined the Labour Party at 18 and was made a life peer in 1998.
However, his political career has been dogged by a series of controversies.
In 2007 he hit the headlines when he criticised the awarding of a knighthood to Salman Rushdie.
And in 2008, he had to publicly deny rumours he planned to defect to the Conservative Party, alleging the speculation was being spread by a Labour minister who was a "sad loser".
He was also suspended by the party for three months last year for allegedly offering a £10m bounty for the capture of US president Barack Obama - which he denied.
After he was jailed in 2009, the peer served only 16 days of his prison sentence before he was freed by the Court of Appeal.
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