It said the party locally had failed to engage with the community in Bradford West, with its large population of Asian origin, or to win voters’ trust by working on their behalf.
The party’s ruling National Executive Committee approved recommendations that local parties should make greater efforts to engage with ethnic minority communities in areas where they make up a large proportion of the electorate - including by ensuring that its candidates reflect the communities they seek to represent.
Labour leader Ed Miliband ordered an inquiry into the crushing defeat in March when Mr Galloway took more than 55 per cent of the vote on a 36 per cent swing in the formerly safe seat.
A panel of NEC members who have visited the city in the past few weeks found a perception local Labour people were not on their side and this was something Mr Galloway tapped into effectively.
Mr Galloway was also extremely effective in his use of social networking sites such as Twitter to build support, the report found.
With the Liberal Democrats now in the coalition Government, and Labour having recently been in office, Respect was able to attract protest votes from those who viewed all three of the main parties as part of the establishment.
The report recommended local parties should aim to get members out on doorsteps and using social media to discuss voters’ concerns, rather than spending time having meetings.
Labour general secretary Iain McNicol admitted the Bradford West campaign had been an “off-the-shelf by-election model” and said the party needed to modernise the way it behaves both during and between elections.