Lord Ahmed is said to have been caught on camera blaming his prison sentence - for sending text messages shortly before his car was involved in a fatal crash - on pressure placed on the courts by Jews “who own newspapers and TV channels”.
In an interview with the Huffington Post he has rowed back from the comments, describing them as “completely wrong” and “unacceptable”.
The peer said he could not believe the video when he saw it and said the statement was the product of a “twisted mind”, according to the website.
Lord Ahmed added that he did not “really have any explanation or excuse” for why he made the comments and said he was “embarrassed”.
“I only believe in facts and to be honest I should have stuck with the facts rather than with conspiracy theories,” he told The Huffington Post.
According to the website he also apologised for embarrassing Labour leader Ed Miliband. “He’s of the Jewish faith and I’m sorry that I embarrassed him - or anybody else in the Labour Party.
“I’m particularly sorry to all my colleagues in the House of Lords and in the House of Commons because one thing many of them know is that I’m not anti-Semitic or a conspiracy theorist.”
Lord Ahmed told the Press Association today that he stood by the comments and repeated his apology.
The Muslim peer was suspended from the Labour party earlier this month after The Times obtained video of an Urdu-language broadcast in Pakistan in which he discussed the decision to sentence him at Sheffield Crown Court, rather than a magistrates’ court with lesser sentencing powers.
He allegedly said: “My case became more critical because I went to Gaza to support Palestinians. My Jewish friends who own newspapers and TV channels opposed this.”
Lord Ahmed was suspended from the Labour Party for three months last year over reports that he offered a 10 million-dollar “bounty” for the capture of US President Barack Obama and his White House predecessor, George Bush. The peer denied having made the comments, published in a Pakistani newspaper, and was reinstated after an investigation by Labour Lords Chief Whip Lord Bassam.
Pakistan-born property developer Lord Ahmed, 55, joined the Labour Party in his teens and was made a life peer in 1998.
In 2009 he was jailed for 12 weeks for dangerous driving after sending and receiving text messages minutes before his car crashed into a stationary vehicle on the M1 near Sheffield on Christmas Day 2007.