The Sun reported the shadow chancellor signed a controversial statement of demands written by the Socialist Campaign for a Labour Victory, which argued Britain's domestic security service should be disbanded and its police disarmed.
Despite an earlier claim that McDonnell hadn't seen the letter, his spokesperson now says he posed for a photograph with it "in good faith", continuing to deny he supports the specific proposals.
The demand to "extend civil liberties and rights to organise and protest" included a clause to "disband MI5 and special police squads, (and to) disarm the police."
McDonnell appears to hold the letter which includes the demands, still available on the campaign's website:
Click here for a zoomable view of the letter of demands as it appears on the SCLV website
And in another version of the letter, McDonnell is listed among other Labour party figures as an early signatory.
But the socialist group issued a clarification surrounding McDonnell's support on Thursday afternoon, saying that he did not in fact sign the specific list of demands, but rather signalled his support for the group's broader aims and principles.
It wrote: "We have been asked for clarification on a particular point.
"John McDonnell MP spoke to an SCLV meeting in January, about the importance of socialists supporting the Labour Party. He was not present for the discussion of the draft demands and had no involvement in drafting them.
"On our website John’s signature is attached to the general statement of principles, which he signed up to, and not to the list of specific demands, which he did not sign up to.
"The demands were a matter of debate and discussion in the campaign and the movement; the general statement was the only thing people signed up to."
The campaign group did not explain why it had referred to McDonnell as an 'early signatory' on a version of the letter.
A version of the letter as it appeared on the SunNation website
Earlier on Thursday, McDonnell was forced to issue a denial to claims he thought Britain's police force should be entirely unarmed - a topic made more sensitive following last Friday's terror attacks in Paris.
Despite the photograph, McDonnell's team had initially said he had not seen the letter.
His spokesperson told the Sun: “This is the first time John has ever seen this letter and certainly never signed it.
“He doesn’t support such views, and only this week John offered his support to the government to further fund the security services and police.”
However, the shadow chancellor's team has now sought to clarify the situation with a subsequent statement which read: “John posed in good faith to stand with a copy of what he thought were the principles he signed up to and not the demands which he had never seen before yesterday.
“To reiterate John does not share these views. Only this week he has called for additional funding for the security services to support them in their vital work in defending our country.”