Labour has dropped the previous Tory government’s plan to challenge the International Criminal Court’s (ICC) application for an arrest warrant against Benjamin Netanyahu, Downing Street has said.

A No 10 spokeswoman confirmed that the Government will not submit an objection.

“This was a proposal by the previous government which was not submitted before the election, and which I can confirm the Government will not be pursuing in line with our long standing position that this is a matter for the court to decide on,” the spokeswoman said.

The move caused diplomatic tensions with Israel, with a senior Israeli official reportedly condemning the “fundamentally wrong decision”.

The No 10 spokeswoman noted that the Government believes very strongly in the separation of powers and the rule of law domestically and internationally.

“I think you would note that the courts have already received a number of submissions on either side, so they are well seized of the arguments to make their independent determinations,” she said.

ICC prosecutor Karim Khan in May requested arrest warrants for Israeli prime minister Mr Netanyahu and defence minister Yoav Gallant over Israel’s war in Gaza.

Rishi Sunak’s government had told the ICC it intended to submit arguments questioning whether the ICC had the right to order the arrest of Israeli nationals.

The Hague-based war crimes court gave the UK until Friday to decide whether it would do so.

The conflict in Gaza has been a thorn in the Labour leader’s side, with his initial refusal to call for an immediate ceasefire costing the party votes and seats in the General Election despite its landslide.

Former MP Jonathan Ashworth was one of several Labour candidates defeated by independents who made Gaza a major part of their campaign.

Since entering Government, Labour has restored funding to the United Nations’ Palestine relief agency UNRWA, in a major shift from the stance of the previous government which had suspended funding in January.

Sir Keir has also stressed that a Palestinian state has an “undeniable right” to be recognised as part of a Middle East peace process.

The move was welcomed by pro-Palestinian groups and human rights organisations.

Sacha Deshmukh, Amnesty International UK’s chief executive, said: “This was a totally misguided intervention by the last government and we strongly welcome the decision to drop it.

“Instead of trying to thwart the ICC’s much-needed Palestine investigation, the UK should be backing efforts to bring all perpetrators of war crimes and possible genocide to justice.”

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Hannah Bond, co-chief executive of ActionAid UK, said: “We’re pleased to see the new government abandon the legal challenge to the International Criminal Court’s case.

“The court must be free to pursue the course of justice unhindered and the UK government must support it in doing so, as well as respect and comply with whatever the ultimate outcome of the case may be.”

A senior Israeli official told reporters in Washington that “Israel is deeply disappointed by this fundamentally wrong decision”, according to The Times of Israel.

“It is contrary to justice and truth, and violates the right of all democracies to fight terrorism,” the official reportedly said.

Mr Netanyahu and senior aides are in the US as he seeks to bolster support for his country’s fight against Hamas.

The Board of Deputies of British Jews and the Jewish Leadership Council said in a joint statement that Labour’s announcements “signal a significant shift in policy, away from Israel being a key UK ally”.

“This would not only be a strategic error but a moral one.”

The Labour Friends of Israel group said: “The British Government’s desire to defend international law is laudable but its decision today is deeply disappointing and will not advance that goal.”