Ex-minister Phil Woolas will not return to Labour even if he wins his appeal against the decision to strip him of his seat, Harriet Harman has suggested.
"It is not part of Labour's politics for somebody to be telling lies to get themselves elected," the party's deputy leader said.
An election court barred Mr Woolas from politics for three years for making false statements against his opponent.
A successful appeal would not change those findings of fact, Ms Harman said.
Mr Woolas was suspended from Labour after the first judgement of its kind by an election court for 99 years.
The court was told Mr Woolas stirred up racial tensions during a campaign which saw him retain his Oldham East and Saddleworth seat by 103 from Lib Dem candidate Elwyn Watkins.
Mr Woolas has said he intends to seek a judicial review of the decision, which Labour - who have suspended him - are not supporting.
Ms Harman told the BBC's Andrew Marr Show that even if the appeal was successful there would be no future for Mr Woolas in the party.
She said: "Whatever happens in an appeal - what might happen in an appeal, if he does appeal, it could be that they could say on the basis of the facts that the election court found it was not warranted for them to strike down the election result and disqualify him, so he might win on a legal basis.
"But it won't change the facts that were found by the election court, which was that he said things that were untrue knowing it, and that is what we are taking action on - because it is not part of Labour's politics for somebody to be telling lies to get themselves elected."
She went on: "That's not going to change, and that's what we regard as very serious and that's why we have suspended him."
There would be a disciplinary process to follow within the party, following the decision to suspend him on Friday.
She also defended the decision to have kept Mr Woolas as an immigration spokesman until the court decision, saying he had been continuing the role he had done in government before the election.
Ms Harman said that, pending a possible appeal, Labour would fight a "vigorous campaign" in the by-election focusing on what the coalition government parties "are doing on housing benefit, penalising the unemployed, putting up tuition fees".
Foreign Secretary William Hague told the Andrew Marr Show the Conservatives would put up a candidate in the by-election rather than supporting their Lib Dem coalition partner's candidate.
Mr Hague said they were "in a coalition, not a merger" and said coalition parties standing against each other happened all over the world, as well as in council by-elections in the UK on most Thursdays.
The Commons Speaker John Bercow will outline on Monday whether to initiate a by-election for Oldham East and Saddleworth immediately, or wait for further legal proceedings.
The case against Mr Woolas was brought under Section 106 of the Representation of the People Act.
This makes it an offence to publish "any false statement of fact in relation to the candidate's personal character or conduct" to prevent them being elected - unless they believed it was true and had "reasonable grounds" to do so.