Lord Nazir Ahmed had allegedly blamed Jewish-owned media organisations for his imprisonment for dangerous driving in a Pakistani television interview.
He told the 'Huffington Post UK' today that he could not "believe" it when he saw the 'Times' reports earlier this month of what he had said in the interview.
"I only believe in facts and to be honest I should have stuck with the facts rather than with conspiracy theories," he said in reference to his remarks.
He also apologised for embarrassing Labour party leader Ed Miliband.
Also Read
The Pakistan-born property developer joined the Labour party in his teens and was made a life peer in 1998 - among the first British Muslims to be elevated to the post.
In 2009, he was jailed for 12 weeks for dangerous driving after sending and receiving text messages minutes before his car crashed into a stationary vehicle on the motorway near Sheffield on Christmas Day 2007.
He told an Urdu-language broadcast that pressure had been placed on the courts to charge him with a more serious offence because of his support for Palestinians.
"My case became more critical because I went to Gaza to support Palestinians. My Jewish friends who own newspapers and TV channels opposed this," the Times reported him as saying in Pakistan.
Labour immediately suspended the 55-year-old peer, with party leader Miliband describing the reported comments as "disgraceful".