Diane Abbott has had the Labour whip restored, the PA news agency understands.
It comes after pressure on Labour leader Sir Keir Starmer intensified after reports that an investigation into her racism comments was completed five months ago.
Labour withdrew the whip from the long-standing MP for Hackney North and Stoke Newington in April 2023, after she suggested Jewish, Irish and Traveller people experienced prejudice, but not racism.
BBC Newsnight reported that Labour’s National Executive Committee (NEC) had written to Ms Abbott in December 2023 to say it had concluded an inquiry into her comments.
Ms Abbott was given back the Labour whip earlier on Tuesday, PA understands.
But it is unclear whether she will stand as a Labour candidate in the General Election.
Sir Keir earlier declined to say whether she would seek election under his party’s banner on July 4.
Asked about the investigation finishing in December, the Labour leader told broadcasters: “The process overall is obviously a little longer than the fact-finding exercise.
“But in the end, this is a matter that will have to be resolved by the National Executive Committee and they’ll do that in due course.”
Sir Keir has previously said he could not get involved in the case, which would be resolved by June 4, when Labour’s final list of candidates is decided.
The Times reported that Ms Abbott, Britain’s first black woman MP, will be banned from standing as a Labour candidate, with suggestions the lifting of her suspension would allow her to leave politics “with dignity”.
Ms Abbott was reported to have been issued with a “formal warning” by the NEC for “engaging in conduct that was, in the opinion of the NEC, prejudicial and grossly detrimental to the Labour Party”.
She was told to take part in an online e-learning module, which she completed in February, something that Labour’s chief whip allegedly acknowledged by email.
Campaign group Momentum said the revelation that the internal probe had already concluded was “outrageous” and confirmed that Sir Keir “is trying to force Britain’s first black woman MP out of Parliament”.
Jeremy Corbyn, under whose leadership Ms Abbott served as shadow home secretary, posted a video in which he said Ms Abbott “has been disgracefully treated by the Labour Party” and left “in limbo”.
Ms Abbott was an independent MP when Parliament was prorogued on Friday, May 24, ahead of the July 4 election.
The veteran MP was suspended after she responded to an Observer article headlined: “Racism in Britain is not a black and white issue. It’s far more complicated.”
She wrote in a letter to the title: “It is true that many types of white people with points of difference, such as redheads, can experience this prejudice. But they are not all their lives subject to racism. In pre-civil rights America, Irish people, Jewish people and Travellers were not required to sit at the back of the bus.”
Ms Abbott later said she wished to “wholly and unreservedly withdraw my remarks and disassociate myself from them”.
Conservative Party chairman Richard Holden said: “On Friday Sir Keir Starmer said that the investigation into Diane Abbott’s conduct was ongoing and ‘not resolved’.
“Now it has been confirmed the Labour investigation into Diane Abbott concluded five months ago and she has already been given a formal warning. It’s inconceivable that Starmer, the Labour leader, wasn’t told the process had finished and a warning issued.
“No ifs, no buts, this isn’t another flip-flop or yet another policy U-turn. Sir Keir Starmer has blatantly lied to the British people and has serious questions to answer.”
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