Labour will pay “substantial damages” to whistleblowers who contributed to a TV expose of its handling of anti-Semitism as Sir Keir Starmer continues efforts to distance the party from his predecessor Jeremy Corbyn.

The party also issued an unreserved apology over “defamatory and false allegations” made following a BBC Panorama investigation.

Seven former employees who worked in the party’s governance and legal unit, who were responsible for the investigation of allegations of misconduct by party members, sued Labour after it issued a press release describing them as having “personal and political axes to grind”.

The legal action followed the broadcast in July 2019 of a BBC Panorama programme titled Is Labour Anti-Semitic?.

Katherine Buckingham, Michael Creighton, Samuel Matthews, Daniel Hogan, Louise Withers Green, Martha Robinson and Benjamin Westerman all had concerns there was “a lack of commitment” by Labour to properly investigate anti-Semitism within the party, the High Court heard on Wednesday.

At a brief hearing in London, their barrister William Bennett QC said: “The whistleblowers were highly critical of the Labour Party’s approach to tackling anti-Semitism within its ranks.”

He told Mr Justice Nicklin: “Before the broadcast of the Panorama programme, the Labour Party issued a press release that contained defamatory and false allegations about the whistleblowers.”

Mr Bennett said Labour “accused the whistleblowers of having acted in bad faith during and after their employment with the intention of harming the Labour Party” – allegations he said were “untrue and defamatory”.

At the same hearing, Labour also apologised to John Ware – the journalist who made the Panorama programme – for falsely accusing him of “deliberate and malicious misrepresentations designed to mislead the public”.

Mr Bennett said Labour had alleged Mr Ware “invented quotes, flouted journalistic ethics and… knowingly promoted falsehoods” in pursuit of “a pre-determined outcome to the question asked by the Panorama programme”.

He added the party had also agreed to pay “substantial damages” to Mr Ware.

In a statement, the claimants’ solicitor Mark Lewis said: “Today in the High Court, the Labour Party retracted its false allegations made about the Panorama programme asking whether Labour was anti-Semitic.

If we are to restore the trust of the Jewish community, we must demonstrate a change of leadership

“The answer was a clear ‘yes’. Labour chose to double down and attack the programme’s presenter, John Ware, and the whistleblowers rather than addressing the truth of the problem.

“It is ironic that the workers’ party chose to act as disgruntled bosses who had been caught out.”

Labour’s handling of anti-Semitism allegations under Mr Corbyn’s leadership is the subject of an inquiry by the Equality and Human Rights Commission – and Sir Keir has already received a draft report from the watchdog.

The party said that under Sir Keir and deputy leader Angela Rayner, Labour is “committed to tackling anti-Semitism”.

In a statement, the party said: “Anti-Semitism has been a stain on the Labour Party in recent years. It has caused unacceptable and unimaginable levels of grief and distress for many in the Jewish community, as well as members of staff.

“If we are to restore the trust of the Jewish community, we must demonstrate a change of leadership.

“That means being open, transparent and respecting the right of whistleblowers and the free press and freedom of expression which includes the right to object to things written or published.”

Outside court, shadow attorney general Lord Falconer said: “It is for the (Equality and Human Rights) Commission to make its findings public when it chooses… but we have brought to an end a chapter when the Labour Party was accusing whistleblowers of behaving dishonestly and I’m incredibly glad that we have brought it to an end.”

The settlement was welcomed by Jewish Labour campaigners but the payout was condemned by the leader of the Unite union, the party’s biggest donor.

Senior MP Dame Margaret Hodge said: “This is a big step in the right direction and shows just how far the Labour Party has come since last year.”

The Jewish Labour Movement said: “We welcome the decision by the Labour Party to withdraw and apologise for the defamatory statements made against seven brave whistleblowers who brought to the public’s attention the scale of discrimination perpetrated against Jewish Labour members.

“It is a sad reflection of its historic role as the party of working people that Labour sought to pursue and silence its former employees for speaking out against racism.”

But Unite general secretary Len McCluskey, an ally of Mr Corbyn, said: “Today’s settlement is a misuse of Labour Party funds to settle a case it was advised we would win in court.”

He said a leaked report on anti-Semitism – which detailed the factional splits in the party’s headquarters – told a “very different story about what happened”.

The BBC welcomed the “long overdue apology” to Mr Ware and the Panorama whistleblowers.

The broadcaster said: “The BBC will always support fair and impartial reporting, exposing wrongdoing and holding power to account.

“The Panorama programme did precisely that, but was subject to an extraordinary and vitriolic attack by the Labour Party.”