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Labour legislator Paul Flynn told a parliamentary committee that two constituents had complained that ambassador Matthew Gould "was serving the interest of the Israeli government."
Flynn added: "I do not normally fall for conspiracy theories, but the ambassador has proclaimed himself to be a Zionist."
The Jewish Chronicle newspaper later quoted Flynn as saying the ambassador to Israel should be someone who "can't be accused of having Jewish loyalty."
Fellow lawmakers condemned the remarks, but Flynn called allegations of anti-Semitism "ludicrous."
On his blog Thursday, he said he was "a lifelong friend of Israel and Jewish causes."