Joshua Bonehill-Paine, a former antisemite selected by the Conservatives to contest a council election next year, has withdrawn his candidacy.
In a post on X, Mr Bonehill-Paine said he needed to “show the Jewish community how much I regret my previous actions”.
Conservative leader Kemi Badenoch said she was “sad” that Mr Bonehill-Paine “won’t be given the space to explain his position and represent his community”.
She added that he would now work with the Conservatives on tackling radicalisation as part of the party’s culture and integration commission.
She said: “If we are going to stop extremism and antisemitism we are going to need help from those people who were part of the problem, but have now changed and are being part of the solution.
“Piling on them and trying to get them cancelled may be sport for other parties, but this is a different Conservative Party.”
Mr Bonehill-Paine’s selection to contest the Crewkerne South ward in Somerset next May prompted a storm of criticism from Jewish groups and opposition politicians.
The Board of Deputies of British Jews and the Jewish Leadership Council called for the party to change course, while Labour peer Baroness Luciana Berger said he should not have “any role in public life – because of both his racism and his view of women”.
Mr Bonehill-Paine was jailed in 2016 after he was convicted of racially aggravated harassment of Lady Berger, who is Jewish.
He had previously been jailed for producing an advert for a neo-Nazi rally illustrated with a picture of Nazi concentration camp Auschwitz which promised “an absolute gas”.
He has since apologised for his past offending and said he has dedicated himself to “challenging the wave of hatred British Jews continue to face”.
In his post on X, he said: “The last 24 hours have shown that a lot of people do not understand how terrible I feel about the things I did when I was much younger.
“I know that my previous actions continue to cause pain in the Jewish community. I had thought that getting involved in my local council and working hard for my community was a good way to show how much I have changed and that I want to give something back.
“I realise now that the fight against antisemitism is something that I actually need to do more of, I need to show the Jewish community how much I regret my previous actions and how hard I will work to fight to help destroy anti-semitism and rebuild trust.”
He added that Mrs Badenoch had offered him a position as an adviser to the Conservatives’ culture and integration commission “specifically focusing on how young men become radicalised”.
Mrs Badenoch said: “While I am sad that Joshua feels he won’t be given the space to explain his position and represent his community, I am glad he is going to work with me and the party on tackling radicalisation as part of our culture and integration commission.”
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