Veteran MP Frank Field is set to "make an announcement on his political future" tomorrow.
The chairman of the Work and Pensions Select Committee sits as an independent after resigning the Labour whip last August citing anti-Semitism and "nastiness" in the party.
Mr Field, 77, has been MP for Birkenhead in Merseyside since 1979 and is one of the longest-serving MPs in the Commons.
The one-time minister for welfare reform, who was charged by Tony Blair to tackle the welfare state by "thinking the unthinkable", said last year that Labour had become "a force for anti-Semitism in British politics".
In his letter resigning the whip he added: "Britain fought the Second World War to banish these views from our politics, but that superhuman effort and success is now under huge and sustained internal attack.
"The leadership is doing nothing substantive to address this erosion of our core values.
"It saddens me to say that we are increasingly seen as a racist party. This issue alone compels me to resign the whip."
As the Work and Pensions committee chairman, Mr Field has been a vocal critic of the Government's Universal Credit reforms and often speaks out in the Commons on rising poverty and inequality levels.
Mr Field is set to make the announcement at noon on Friday August 2 at Birkenhead Town Hall.