Dr Azzam Tamimi, spokesman for the Muslim Association of Britain (MAB), threatened to sue Louise Ellman MP if she ever repeated the accusations outside of the House of Commons.
Ellman - who is protected from libel actions for statements she makes in parliament - accused Tamimi and other MAB members on Thursday of inciting racial hatred against British Jews.
The MP cited a series of speeches in which Dr Tamimi attacked Israel and supported Palestinian resistance group Hamas, who she accused of murdering civilians.
She also alleged he told a conference in Vienna that Jews should "sail on the sea in ships back to where they came from and all drown in it".
Ellman told fellow MPs that the MAB and Tamimi were provoking anti-Semitism under the guise of anti-Zionism.
"He (Tamimi) and his arguments incite hatred against Jews. Messages put out by this association (MAB) and other Islamist groups... incite growing violence against Jews in the UK"
Louise Ellman MP
"He and his arguments incite hatred against Jews," she said. "Messages put out by this association and other Islamist groups... incite growing violence against Jews in the UK."
However, Tamimi now believes he can proceed with legal action after Ellman stood by the allegations in a BBC radio programme.
Dr Tamimi told Aljazeera.net on Monday: "We are seeking legal advice at the moment, but given what she said to the BBC on Friday I think we have a definite case against her."
And the academic, who is one of the MAB's most prominent public faces, defended his support for Hamas.
"I don't have a formal relationship with Hamas and some of the leading members of Hamas were my classmates. I consider them a legitimate part of the Palestinian liberation struggle."
"It is against my Islamic and human principles to say things like 'We should drown the Jews'. My vision for a future Palestine is a larger entity where Jews, Muslims and Christians can live together like they have done for 13 centuries"
Dr Azzam Tamimi,
Muslim Association of Britain
But he denied making some of the more inflammatory statements that Ellman, who he describes as an "arch Zionist", attributed to him.
"It is against my Islamic and human principles to say things like 'We should drown the Jews'. My vision for a future Palestine is a larger entity where Jews, Muslims amd Christians can live together like they have done for 13 centuries.
"What I did say is that if there are Jews who choose not to live in such a place, then we will help them to go back."
He added: "I don't know where she gets things like that from ... I haven't even been to Vienna for two or three years and all the speeches I made there were in Arabic.
"Either she is lying about what I said or it has been poorly translated or distorted."
According to official figures, the tide of attacks on Jews in the UK is on the rise.
In the first quarter of 2003, there were 89 incidents in Britain, a 75% rise on the same period the previous year.
Jewish and pro-Israeli groups say the violence has been incited by Arab and Muslim lobbies who have been given free reign by the British media.
But Muslim groups deny the accusations and themselves accuse the media of showing a pro-Israel bias in its reporting.