Ken Livingstone has been readmitted into the Labour Party.

The decision was announced by the party's National Executive Committee on Tuesday afternoon.

He was originally suspended by the party for five years after deciding to run as an independent candidate in the 2000 London mayoral election.

But with backing from the prime minister, it has been expected that Labour officials would end his suspension early - clearing the way for him to stand as Labour's candidate in elections later this year.

Livingstone was interviewed by a Labour panel judging whether he should be readmitted into the party earlier in the day. The panel then reported back to the full NEC for a final decision.

The positive decision clears the way for a final vote of London party members on whether he should be Labour's mayoral candidate.

Nicky Gavron, who had been Labour's alternative candidate if Livingstone had not been readmitted, welcomed the decision.

"This is absolutely the right decision by the NEC. It is right for London and good for Labour," she said.

"I now hope that Ken can be quickly adopted as Labour's official candidate and that we can move forward with a united and strengthened campaign.

"Labour has a positive story to tell in London and Ken should be part of it. The only losers in today's decision are the Tories and Liberal Democrats."

Polls suggest that Livingstone is the most likely candidate to win the June poll, but the Conservatives have attacked both Labour and Livingstone for the "stitch up".

"This is just a cynical deal and a total stitch up for Londoners," said Tory mayoral candidate Steve Norris.

"But this is a great New Year's gift for my campaign as the polls show Livingstone will do worse under New Labour than as an independent.

"This begs the question as to what price is he paying and what polices he is jettisoning in exchange for his party membership card.

"We already know that part of the deal is that New Labour will write his manifesto - so much for Ken's principles."

And Liberal Democrat candidate Simon Hughes said that Livingstone could not sign up to a Labour manifesto without compromising his own policy positions.

"It will take much more than a new declaration of vows for the public to believe that a Livingstone-Labour remarriage will be more than a ceremony designed to hide embarrassment and to see a fractious couple through to the mayoral election," he said.

"I much look forward to hearing Mr Livingstone's views on New Labour policies such as tuition fees and the war in Iraq.

"And, having taken the Labour government to court over funding for the Tube at an estimated cost to Londoners of £4 million, is Ken Livingstone going to say he now supports that policy as well, or is it for Gordon Brown to admit he was wrong?

"If Labour wants Mr Livingstone to stand for re-election under New Labour colours then presumably he will, at last, be expected to sign up to their policies as well."