The decision to suspend Lord Nazir came in the wake of his visit to Pakistan on April 13, where he addressed a reception arranged by the business community of Haripur, in his honor. At that reception, he allegedly announced a "bounty" for the capture of American Presidents Barack Obama and his predecessor George Bush.
He reportedly made those comments in reaction to the US' announcement of a $10m bounty on the founder of LeT, Hafiz Saeed.
Lord Nazir's suspension was confirmed by a Labour spokeswoman who said: ‘We have suspended Lord Ahmed pending investigation.
‘If these comments are accurate we utterly condemn these remarks which are totally unacceptable.
‘The international community is rightly doing all in its power to seek justice for the victims of the Mumbai bombings and halt terrorism.’
However, Lord Nazir has responded by saying that he has been misquoted by the newspaper, speaking to the Press Association, he said: 'I never said those words.' ‘I did not offer a bounty. I said that there have been war crimes committed in Iraq and Afghanistan and those people who have got strong allegations against them - George W Bush and Tony Blair have been involved in illegal wars and should be brought to justice.
‘I do not think there's anything wrong with that. If the Labour Party want to suspend me I will deal with the Labour Party. They will have to give me some evidence.’
Lord Nazir Ahmed is a Muslim member of the house of lords who was also involved in a car accident in 2007 where he was sentenced for 12 weeks in jail for using his cell phone while driving which may have caused the accident.