The former shadow chancellor was, along with Jeremy Corbyn, one of 20 Labour MPs to defy Starmer’s orders and to vote against the legislation this week.
He described the Covert Human Intelligence Sources Bill, which will put into law for the first time an exemption to allow undercover informants working for the police and MI5 to commit crimes, as “unsupportable”.
And he urged Starmer to give Labour MPs a free vote in future divisions on the legislation, describing it as a “matter of conscience” because it deals with life and death.
Campaigners have long called for informants’ shadowy practices to be put in law, as long as there are safeguards to explicitly exclude murder, torture or sexual violence.
But the bill is deliberately vague on this as ministers fear that terrorists or others will be able to expose undercover agents by setting them tests against a “checklist” of crimes.
Starmer has said he will try to amend the Bill but McDonnell stressed: “I just can’t see what amendment would enable Labour to vote for this legislation and therefore if you can’t vote for it, and it is so serious, you just have to vote against”.
On Labour’s apparent plans to continue abstaining on the laws if it cannot pass amendments, McDonnell told HuffPost UK’s Commons People podcast: “I just think it’s a mistake.
“On issues like this, they are matters of conscience, they are dealing with life and death in some instances and certainly in terms of extreme emotional and physical harm that could take place as well.
“I think actually you do have to take a decision and you have to stand up on these ones.
“If the Labour frontbench doesn’t do that, that’s a matter for them, but I’ve made it clear that I won’t vote for this legislation.
“And I can’t see how it could be amended to make it in any way effective in those terms.
“I do not see how we can sanction state agents, whether they be military, police or others, or undercover agents, to perpetrate murder, rape or torture in our names.”
McDonnell described the timing of the Bill’s introduction as “extremely suspicious”, despite a recent court case on the issue, and speculated that Boris Johnson and his chief aide Dominic Cummings may be trying to undermine Starmer’s attempts to paint himself as a patriot.
And he called on Starmer and other party leaders to give their MPs a free vote.
McDonnell said: “I think it is, to a certain extent, Boris Johnson and Cummings and others playing politics with this.
“Keir quite rightfully has, in his conference speech, made it clear about his own personal patriotism and what the party stands for in that respect.
“And I wonder, I just speculate, whether these Bills were brought forward with a view to try and undermine some element of that.
“If it is a grubby political exercise like that by the Tories I think it’s despicable.”
He added: “Anything that involves the potential of determining life and death like this I think is a matter of conscience and I would rather there was no whip whatsoever across the whole House.”