THE Labour Party has decided to fund shamed councillor Miranda Grell's appeal against a ruling that she smeared an election rival.

Grell won a Leyton ward seat for Labour, overturning a large majority held by Liberal Democrat Barry Smith.

But Grell, who was seen as a rising star in the Labour Party, has since been found guilty of claiming Barry Smith was a paedophile while canvassing for votes in last year's local elections.

The judgement means that she is disqualified from being a councillor for three years and has been suspended from her job as aide to the Deputy Mayor of London Nicky Gavron.

She is appealing the decision and a campaign, called Justice for Leyton Ward, was set up to raise the £30,000 Grell estimates she needs to fight and win her appeal.

But the national Labour Party has now agreed to pay for her legal costs until the appeal is over.

Justice for Leyton campaign chairman Andrew Lock said: "This is fantastic news for our campaign to get justice for the people of Leyton.

"People were shocked by the result of the trial, Miranda was the person who went out to speak to local people.

"She is an excellent councillor and a good friend. Although we no longer need money for legal costs our campaign will continue."

A Labour party spokesman refused to explain why the party was supporting Grell.

The party did not state that it believed Grell was innocent and did not answer a question asking whether the decision risked damaging the party's reputation.

No date has been announced for the appeal hearing, but it is expected to be in the next few weeks.

Grell is appealing the verdict, on the grounds that it went against the weight of the evidence heard at the trial, at Snaresbrook Crown Court.

She is expected to allege that the police investigation was flawed and that a racist plot was partly the reason why allegations were made against her.