Lord Ahmed, who denied the accusations published in a Pakistani newspaper the Express Tribune, thanked Chief Whip Lord Bassam for a "fair" investigation. Lord Ahmed said he was "delighted" the suspension had been lifted as he had been a member of the Labour Party for 34 years.
He told BBC Asian Network said his colleagues in the Lords had been "very sympathetic" while the suspension was in place. The story was "lies" and he said he was considering taking legal action against the Express Tribune newspaper, he added.
In April this year the Express Tribune quoted Lord Ahmed saying: "If the US can announce a reward of $10m for the captor of Hafiz Saeed, I can announce a bounty of £10m on President Obama and his predecessor George Bush." They later corrected the article.
In response to the article, Lord Ahmed said: "I'm shocked and horrified that this whole story could be just made up of lies. I never mentioned President Obama, I never mentioned the word bounty.
"It was a discussion about people investing in Pakistan and yes, I did talk about illegal wars in Iraq and Afghanistan and Bush and Blair involved in it. But I did not mention any bounty or President Obama and the sort of rubbish that's been on the media."
It's a sorry reflection on the Labour Party that it ever suspended Lord Ahmed in the first place, on the basis of a story that was quickly exposed as false, and without bothering to check its accuracy or even ask him for an explanation. That didn't prevent certain anti-fascists from using the suspension to attack Lord Ahmed. But then, he is a supporter of the Palestinian cause and as such has inevitably been a target for Zionists.
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