A senior Labour politician says he "suspects" the anti-Semitism row led to his party's failure to take control of Barnet Council.
Shadow health secretary Jonathan Ashworth believes Labour needs to regain the trust of voters who had been "turned away".
Labour had been expected to win Barnet for the first time, however the Conservative Party held the council.
The Tories increased their majority by winning 38 seats.
Labour group leader Barry Rawlings said the party's anti-Semitism row had "made a difference" as Barnet has one of the UK's largest Jewish populations.
"If it had happened a couple of years ago Barnet would now be a Labour council," he said.
Barnet had been in no overall control before the election.
Labour won 25 seats compared to 30 in the 2014 election while the Liberal Democrats lost their only seat on the north London council.
The Conservatives controlled Barnet after the last council election in 2014, but it changed to no overall control when one councillor resigned earlier this year.
Adam Langleben, one of the Labour councillors who lost their seat in Barnet, said allegations of anti-Semitism were the key reasons for the party's losses in London.
He told BBC Radio 4's Today programme: "I spent countless hours knocking on countless doors speaking to Jewish voters who are Labour voters or were Labour voters - people who genuinely believe in the same values as the Labour Party, who agreed with our local manifesto for Barnet.
"But they could not vote for a Labour Party that they see as hostile or dangerous to the Jewish community.
"And the Labour Party is seen by far too many people in the Jewish community as being racist right now."
However, Richard Cornelius, Conservative leader of Barnet Council, said voters were more concerned about "local issues" than with accusations of anti-Semitism within Labour.
He said: "They are all basic issues. It was things like potholes, the collection of their rubbish bins and keeping the council tax low.
"Of course there is a concern about anti-Semitism in the Jewish areas, and of course there is a wider concern about it more generally.
"People are horrified, and Labour have to address that."
Speaking at a visit to Barnet, Prime Minister Theresa May said: "People of all faiths have rejected the vile anti-semitism that has gone unchallenged in the Labour party for too long".
Labour MP John Mann, an outspoken critic of Jeremy Corbyn, tweeted that the anti-Semitism row had "cost Labour badly last night".
"A Jewish member for more than 60 years told me on the doorstep he couldn't vote Labour in Barnet yesterday," he said.