The government has ceased funding a British charity which sponsored events accused of promotsing hatred and violence against Jews.
The Department for International Development (Dfid) said that it no longer supported War on Want, which helped pay for "Israeli Apartheid Week" in February this year.
The statement comes as the Telegraph obtained undercover recordings of events where anti-Semitism, demands for the destruction of Israel or naked support for terror were expressed by academics and others at meetings in some of Britain's most prestigious universities.
One speaker, Max Blumenthal, the son of a close adviser to Bill and Hillary Clinton, praised a massacre by Hamas as sending an "incredible message" and said that taking up arms should be "normal" for Palestinians. He compared Israel to the terrorist group Isil, describing it as "the Jewish State of Israel and the Levant, Jsil".
At another rally – sponsored by War on Want – a speaker said that British government policy was created by "Zionist and neo-con lobbies".
A second speaker at the same event spoke of a "rumour" that Israelis were harvesting dead Palestinians' organs.
The meeting, at London University's School of Oriental and African Studies (SOAS), was the London launch of Israeli Apartheid Week, held across UK university campuses to "raise awareness about Israel's ongoing settler-colonial project" and demand boycotts of Israel. They were secretly recorded and passed to the Telegraph.
War on Want, whose logo appears on publicity materials for Israeli Apartheid Week and the meeting, has received £260,000 in funding from Dfid over the last two years.
The subsidy is doubly embarrassing because the Government has recently banned local authorities and other public bodies from implementing boycotts of Israel.
A Dfid spokesman said last night that it has ceased funding of War on Want, apart from a small project with a distinct branch of the charity in Northern Ireland.
Dfid sources said the UK "deplored incitement on both sides of the Israeli-Palestinian conflict".
War on Want spent more than £1,000 to bring Sahar Francis, a Palestinian lawyer, to the UK for the London event.
Ms Francis, the head of the Addameer prisoners' rights group, spoke of a "rumour" that Israelis were stealing organs from Palestinian victims of the violence.
"The eyes were looking in a very strange way and this is why the families suspected [Israel] are stealing their [organs]," she said.
"But we cannot confirm, because [in] most cases it was not ending up with [an] autopsy."
War on Want also paid for the accommodation of another speaker, Steven Salaita, an academic who used the event to attack Israel's "tenuous colonial existence" and defend violence, saying: "If we are going to reduce a project of ethnic cleansing, illegal settlement and military occupation to the minuscule chance that a soldier or a settler will be harmed by an act of resistance by the natives, then we forfeit all right to be taken seriously."
It was a decision by Oxford University Labour Club to endorse Israeli Apartheid Week which triggered the row about anti-Semitism within Labour.
He condemned Israeli Apartheid Week as "a movement with a history of targeting and harassing Jewish students and inviting anti-Semitic speakers to campuses".
However, it can be revealed that a previous Israeli Apartheid Week event, in Leicester last year, was attended by Mohammed Dawood, a serving Labour councillor in the east Midlands city.
Cllr Dawood, a former assistant mayor of Leicester with responsibility for housing and social care, recently tweeted a film showing the burning of the "Zionist entity flag", the Israeli flag.
On social media, Cllr Dawood has described Israelis as "colonisers", said that artists who go to Israel are "like [those] performing in Sun City [the resort in the South African bantustan] under Apartheid" and retweeted a statement that Israeli troops are "Zionist terrorists".
A spokesman for the organisation Jewish Human Rights Watch called on Labour to expel Cllr Dawood.
Many Israeli Apartheid Week speakers seek to destroy the whole of Israel, not just remove it from the occupied territories. At SOAS, Rafeef Ziadah, the event chairman, said that Israeli Apartheid Week "definitively breaks with the Oslo [peace process] paradigm that framed issues in terms of two equal sides", instead "framing Israel for what it is, a settler-colonial state".
She described Israel, which was created in 1948, as " '48 Palestine" and said that the campaign "very importantly spoke about the entirety of the Palestinian people, not just segments of the Palestinian people".
Dr Ziadah is a staff member at SOAS whose post is funded by the Government's Economic and Social Research Council.
Another speaker at the event was Malia Bouattia, a hardline executive member of the National Union of Students known for supporting extremist groups such as Cage, the human rights organisation.
Another meeting, in the London School of Economics on March 5, was addressed by Max Blumenthal, a writer who is also the son of Sidney Blumenthal, a past adviser to former President Bill Clinton and now likely Democratic presidential nominee Hillary Clinton.
Describing the Palestinian enclave of Gaza as a penitentiary, Mr Blumenthal said: "There's often prison revolts which take place everywhere, because people are normal. People are normal in the Gaza Strip, and so they take up arms."
He praised a 2014 massacre carried out by "commandos" of Hamas's armed wing, the al-Qassam Brigades, against Nahal Oz, a kibbutz and army base near the Gaza border, saying it was a way for Palestinians to "recover their dignity" and "pop Israel's security bubble".
"With GoPro cameras attached to their helmets, [they] burst into the Israeli base and kill every soldier they encounter in hand-to-hand combat," said Mr Blumenthal.
"The message it sent to young Palestinians in the West Bank, in Jerusalem and abroad, was incredible ... You see your people in commando uniforms, bursting into a military base and showing up the occupier." In fact Nahal Oz is within Israel proper and is not occupied territory.
He also claimed that the creation of the Palestinian Authority was "the greatest achievement of the Israeli occupation", since it had created an "apartheid fantasy" of a subjugated Palestinian state that even the South African government could never achieve.
John Hilary, the executive director of War on Want said: "Standing up for the rights of Palestinians fits squarely with our work as a registered charity, and the Charity Commission has consistently confirmed this. For decades, Palestinians have faced systematic discrimination and abuse at the hands of the Israeli government."