The leader of Redbridge Council has been suspended from the Labour Party over "extremely serious allegations".
Jas Athwal is running to become Labour's parliamentary candidate in Ilford South, and a decision was due on Saturday. Applications have since reopened.
The move sparked accusations of a "stitch-up" to allow a Jeremy Corbyn supporter to become the candidate.
Mr Athwal said he had provided evidence that the "allegations were untrue".
He tweeted: "This is not a fair process. It is contrary to natural justice. All I seek is a fair hearing and due process."
A Labour spokesperson said: "The Labour Party takes all complaints extremely seriously, which are investigated and any appropriate disciplinary action taken in line with the party's rules and procedures.
"We can't comment on individual cases."
A local Labour Party member told the BBC: "I wish this was a case of the Labour Party doing its due process and taking care of a member, but it's not. It's a naked attempt at a political stitch-up."
Wes Streeting, the Labour MP for neighbouring Ilford North, tweeted to say the "suspension of the local frontrunner just 15 hours before the vote is politically motivated and biased in order to stitch up the selection".
Campaign group Sikhs for Labour said the move put into question whether Labour "still has a place for Sikhs".
The BAME Parliamentary Labour Party group, made up of senior ethnic minority MPs, released a statement saying it was "very concerned" about the suspension.
A Labour Party source said: "This decision was taken by a panel following a report from an independent investigator from a specialist organisation.
"The case was anonymised so the panel did not know who the individual was," the source added.
"The timing has nothing to do with the selection process."
'Right thing to do'
Mr Athwal's case has been referred to the National Constitutional Committee and he has been suspended pending that process.
He is up against Sam Tarry, an ally of Labour leader Mr Corbyn, for the chance to stand for Labour in Ilford South at the next general election.
Current MP Mike Gapes quit the party over its handling of anti-Semitism.
Mr Tarry, a Transport Salaried Staffs Association (TSSA) official, tweeted: "I am gutted that the selection process in Ilford South has been suspended today, but it's absolutely the right thing to do.
"I am proud to have run a positive, people-powered campaign with hundreds of local supporters. I look forward to winning the vote when it comes back."
Redbridge Council said: "No allegations against Councillor Athwal have been referred to the council. Councillor Athwal remains the leader."