Former immigration minister Phil Woolas has been suspended from the Labour Party after an election court found he made false statements about an opponent in May's general election.
Deputy leader Harriet Harman said it was "no part of Labour's politics to try to win elections by telling lies" and the party said it would not support any appeal.
The Labour MP was stripped of his seat and barred from the Commons for three years under the ruling - the first of its kind in 99 years - but said he would seek a judicial review.
Experts said the verdict was a "serious warning" to all politicians that would change the way future election campaigns were fought.
Ms Harman, who is also party chair, said: "The court has found that Phil Woolas said things that he knew were untrue during his election campaign.
"It is no part of Labour's politics to try to win elections by telling lies. We believe in good community relations - in fact that is central to our politics - and Phil Woolas has been suspended from the Labour Party. The legal precedent set by this court judgment raises complex issues, including the dividing line between justified political debate and unacceptable remarks. This is an issue for all political parties, and Labour will ask the Electoral Commission to look at this."
Liberal Democrat leader Nick Clegg welcomed the judgment as a victory for "common sense" and "clean politics".
Mr Woolas announced after the judgment that he would seek judicial review of the decision, But a Labour spokesman said the party "will not be supporting any review or appeal".
The specially-convened election court had heard that Mr Woolas stirred up racial tensions in a desperate bid to retain his seat in Oldham East and Saddleworth.
Liberal Democrat candidate Elwyn Watkins mounted the rare legal challenge over the statements made in a pamphlet and two mock newspapers distributed in the final stages of the election. Mr Woolas won on May 6 by just 103 votes. A fresh election will now be held for the seat.
