Following crunch Brexit votes on Tuesday night, Dame Margaret Hodge confronted the Labour leader directly amid a row over the party’s adoption of a new code of conduct on anti-Semitism.
Mr Corbyn is facing calls to strengthen the document, while Prime Minister Theresa May has accused the Labour leader of trying to “redefine anti-Semitism”.
Dame Margaret told Mr Corbyn he is an “anti-Semite and a racist”, adding: “You have proved you don’t want people like me in the party”.
The Jewish MP has denied reports she swore at the Labour leader.
On Wednesday, a spokesman for Mr Corbyn confirmed “action will be taken” against Dame Margaret, adding her behaviour “is clearly unacceptable between colleagues”.
He said: “Under the terms of the Parliamentary Labour Party rules there has to be respect between colleagues.
“The behaviour was clearly unacceptable under Labour Party rules.”
The spokesman added Mr Corbyn is “always prepared to sit down and discuss” the concerns of fellow MPs and that he is “implacably opposed to anti-Semitism”.
But, the spokesman would not be drawn on what action Dame Margaret might face.
Responding to the news, Labour MP Wes Streeting expressed his hope the “action” against Dame Margaret will take the form of “a fulsome apology to Margaret and the Jewish community for the flagrant disregard shown for their concerns”.
Joining the backlash at Mr Corbyn’s office, fellow Labour MP Liz Kendall highlighted how Dame Margaret “fought off BNP in Barking, she’s fought tax dodgers, and she’s fought for women’s rights and equality… only ‘action’ should be public praise”.
During Prime Minister’s Questions on Wednesday, Mrs May entered the row over Labour’s new anti-Semitism code.
The prime minister demanded Mr Corbyn’s party scrap their document and instead sign up to the International Holocaust Remembrance Alliance (IHRA) definition of anti-Semitism in full.
Although Labour’s new code of conduct, which has been approved by the party’s ruling body, endorses the IHRA’s working definition, it also omits four examples from the IHRA list.
The issue was raised by Tory MP Helen Whateley, who noted how “31 member countries of the International Holocaust Remembrance Alliance have an agreed definition of anti-Semitism”.
She asked: “Does the prime minister agree that all political parties should adopt this definition and its examples without amendments or omissions?”
In response, Mrs May highlighted how “the Conservative Party has done that, but sadly the Labour Party does not agree”.
“The Labour Party is trying to redefine anti-Semitism to allow people to say that Israel is a racist endeavour,” she added.
“The chief rabbi says that what the Labour Party is doing is sending an unprecedented message of contempt for British Jews.
“Even some of his own MPs are saying it is anti-Semitic.
“Anti-Semitism is racism, the Labour Party should accept that, Jeremy Corbyn should accept that and we should all sign up, as the Conservative Party has done, to the definition of the International Holocaust Remembrance Alliance and all its annexes.”
Mrs May had earlier attacked the Labour leader directly on the issue in an answer to Mr Corbyn.
She told him: “When I was negotiating our future security relationship with Europe, he was renegotiating the definition of anti-Semitism.”
Labour’s code of conduct states explicitly that “anti-Semitism is racism”, and goes on to say that “it is unacceptable in our party and in wider society”.
It also does endorse the IHRA’s working definition of anti-Semitism and includes a list of behaviours likely to be regarded as anti-Semitic, copied word-for-word from the international organisation’s own document.
But, it omits four examples from the IHRA list:
:: Accusing Jewish people of being more loyal to Israel than their home country;
:: Claiming that Israel’s existence as a state is a racist endeavour;
:: Requiring higher standards of behaviour from Israel than other nations;
:: Comparing contemporary Israeli policies to those of the Nazis.
Labour says that while the examples are not reproduced word for word, they are covered.
Despite outrage at the code from a group of the UK’s leading rabbis, as well as Labour MPs and peers, the party’s National Executive Committee (NEC) upheld its adoption on Tuesday.
But, a party spokesman added the NEC had “agreed to re-open the development of the code, in consultation with Jewish community organisations and groups, in order to better reflect their views.”