15/04/2012 18:52 BST | Updated 16/04/2012 12:24 BST

Lord Ahmed Suspended After Offering '£10m Bounty For Capture Of Obama And Bush'

A Labour peer has been suspended from the party after he was reported to have put a bounty out on the heads of President Obama and President George W. Bush.

According to Pakistan's Express Tribune, Lord Nazir Ahmed was reacting to the US decision to offer a $10m reward for Hafiz Mohammad Saeed, the founder of the islamist terrorist group Lashkar-e-Taiba.

The militant Pakistani group has been accused of orchestrating the 2008 Mumbai terror attacks which killed 174 people.

Lord Ahmed is reported to have told an audience in Pakistan last Friday: “If the US can announce a reward of $10 million for the captor of Hafiz Saeed, I can announce a bounty of 10 million pounds on President Obama and his predecessor George Bush."

However speaking to the Press Association from Pakistan he denied the allegations. "I never said those words," he said.

"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," he said - adding that he was equally concerned that anyone suspected of terrorism should face justice as well.

A Labour Party spokesman told Politics Home prior to the denial: "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."

According to the BBC the Labour Party suspended Lord Ahmed before it had spoken to him, as it was not able to get in touch with him.

Pakistan born Lord Ahmed was made Britain's first muslim peer in 1998 and is no stranger to controversy. In 2007 he criticised Tony Blair's decision to award author Salman Rushdie a Knighthood, saying he had "blood on his hands".

On Monday Respect MP George Galloway said that Labour's decision to suspend Lord Ahmed was "suicide" and suggested the peer defect to his party.

"I think the suspension of Lord Nazir Ahmed indicates that New Labour is on some sort of suicide mission so far as the Muslim vote goes," he said.

"Lord Nazir is a great figure - not politically close to me - among the Asian heritage population of Britain and is now suspended from the Labour party, as I myself was.

"So let me extend to him an invitation to fill in an application form and join Respect."

During a visit to a job support service in Stratford, east London, Ed Miliband said: "He's been suspended pending an investigation into what he said.

"We need to know if his comments were accurate and that's what we're investigating."