Seven MPs have resigned from Labour and will create a new Independent Group in the House of Commons in the most significant split in British politics for a generation.

Chuka Umunna, Luciana Berger, Chris Leslie, Angela Smith, Gavin Shuker, Mike Gapes and Ann Coffey fired a broadside at Jeremy Corbyn as they quit, condemning his stance on Brexit and response to allegations of anti-Semitism in the party.

Deputy Labour leader Tom Watson warned his party to change or face further damaging resignations following the biggest schism since the formation of the Social Democratic Party in the 1980s.

Mr Corbyn said he was “disappointed” by the announcement, while shadow chancellor John McDonnell challenged the seven to resign from Parliament and fight by-elections under their new independent banner.

There were angry scenes when party chairman Ian Lavery addressed the weekly meeting of the Parliamentary Labour Party at Westminster on Monday evening, amid accusations the leadership had failed to get to grips with anti-Semitism in its ranks.

Afterwards, backbencher Ian Austin, a long-standing critic of Mr Corbyn, warned the leadership’s response had only made the situation worse and could lead to further resignations.

“I don’t think he came close to demonstrating the leadership understand the scale of the problem we have,” he said.

“I think it will result in people thinking long and hard about their position.”

Earlier the seven MPs issued an appeal to politicians from both Labour and other parties to “leave the old tribal politics behind” and join their new grouping in the Commons as crunch votes on Brexit loom later this month.

At a dramatic press conference announcing their collective decision:

– Jewish MP Ms Berger said she had become “embarrassed and ashamed to remain in the Labour Party” which she had “come to the sickening conclusion is institutionally anti-Semitic”.

– Former Commons Foreign Affairs Committee chairman Mr Gapes said he was “sickened that the Labour Party is now a racist, anti-Semitic party”, “furious that the Labour leadership is complicit in facilitating Brexit” and warned a government led by Mr Corbyn would “threaten our national security”.

– Ex-shadow chancellor Chris Leslie said Labour had been “hijacked by the machine politics of the hard left”.

Independent Group of former Labour MPs(PA Graphics)

At the launch in London’s County Hall, Mr Umunna issued an appeal to voters: “For far too long, political parties in Westminster – parties of which we have been a part – have been failing you.

“If you are sick and tired of politics as usual, guess what? So are we.

“If you want an alternative, please help us build it. The bottom line is this – politics is broken, it doesn’t have to be this way. Let’s change it.”

In a call on other MPs to quit their parties, Mr Umunna said: “We’ve taken the first step in leaving the old tribal politics behind and we invite others who share our political values to do so too.”

But The Independent Group’s launch was marred by a gaffe from Ms Smith, who apologised after appearing to describe black people as having a “funny” tint or tinge during a TV interview.

“I am very sorry about any offence caused and I am very upset that I misspoke so badly,” she said after her BBC Politics Live appearance.

The Independent Group is due to hold its first formal meeting later this week.

Responding to the resignations, Mr Corbyn said: “I am disappointed that these MPs have felt unable to continue to work together for the Labour policies that inspired millions at the last election and saw us increase our vote by the largest share since 1945.”

Mr McDonnell told the BBC the seven MPs should “do the honourable thing” and step down in order to contest by-elections.

Both Mr Corbyn and Mr McDonnell come from Labour’s left wing, and Mr Watson said the frontbench team needed to change to reflect the balance of opinion in the Parliamentary Labour Party – which includes many MPs who are critical of the leadership.

He criticised the handling of anti-Semitism allegations and said Ms Berger had fallen victim to “a virulent form of identity politics that has seized the Labour Party”.

In a stark message about Labour’s future, Mr Watson said: “I confess I feared this day would come. And I fear now, that unless we change, we may see more days like this.”

Unite union boss Len McCluskey hit out at the “splitters” who had “no stomach for a fight for Labour’s core values”.

But Unison’s general secretary Dave Prentis said Labour had to “get its act together over Brexit” and “look long and hard at the reasons why the MPs feel they are no longer able to stay in the party”.

State of the parties in the House of Commons(PA Graphics)

Tory Party chairman Brandon Lewis said the resignations confirmed that Labour had “changed irreversibly” under Mr Corbyn.

“Labour has become the Jeremy Corbyn Party – failing to take action on everything from tackling anti-Jewish racism to keeping our country safe,” he said.