Labour MP Diane Abbott has warned her own leader Ed Miliband not to panic and to be careful to avoid 'dog whistle politics' on immigration.
The shadow health minister said the party could be plunged into a downward spiral if it tried too hard to apologise for its record on immigration.
The UK Independence Party had made people 'panicky' about immigration but Mr Miliband must resist the temptation to become 'over-anxious' to reassure voters.
Labour MP Diane Abbott said the party could be plunged into a downward spiral if it tried too hard to apologise for its record on immigration
Ms Abbott said: 'We are in the middle of a recession, or as near as damn it. In a recession you always see a rise in racism and anti-immigrant feeling - you had it in Germany in the 1930s.
'We have to be very careful about our language because when people are frightened about their future, they want to blame outsiders, they want to blame the other, ' she told the Sky News Murnaghan programme yesterday.
'I know Ed thinks very carefully about what he says on the question, there is nothing he has said I disagree with.
'All parties need to be careful of dog-whistle politics on immigration where the text is fine but the underlying message is one that is maybe not so fine.
'I think the rise of UKIP have made people panicky about immigration, but the truth about the fear of immigration is that it’s just a fear – the more immigrants there are living in your area the less likely you are to worry about it.
'I don’t think Ed Miliband is scared of that kind of message. I think as a party we need to be clear, there’s a danger of a kind of downward spiral, if we kind of panic about UKIP and feel over-anxious about reassuring people on immigration.'
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Her comments came as the Bulgarian ambassador to the UK lashed out at local election 'propaganda' describing Bulgarian people as a 'threat' to Britain.
Konstantin Dimitrov said such messages were 'completely unacceptable' in a European country and said a strong response was required.
He singled out UKIP for criticism and blasted the euro-sceptic party as offering 'feeble' messaging.
Leader of the Labour Party Ed Miliband was told not to apologise for its record on immigration
Faith minister Sayeeda Warsi earlier told Murnaghan that David Cameron had made great strides in taking racism out of the immigration debate.
She said: 'Politicians are regularly looking for those which can unite us - we talk about values, sometimes we talk about symbols like the Union Flag.
'We have to keep focussing on those things that unite us. Of course there has to be some quite targeted work... but I think we have got to come back to the approach this Government has adopted, which is about focusing on those things that unite us, being very strong against issues of discrimination and protecting those communities who feel they're subjected to hate crime.
'One of the things David Cameron did incredibly well, even in opposition, was to de-racialise the immigration debate.
'Immigration is not about the colour of anyone's skin any more, it's a simple issue of resources at any one time.'