A Government minister has criticised Susan Hall for claiming Jewish Londoners are "frightened" of Sadiq Khan.
Business minister Nusrat Ghani said Conservatives should not "stoop" to using the "language of fear and demeaning our political opponents" when asked about remarks made by the Tory Mayoral candidate.
Ms Hall is challenging Labour's Mr Khan, who is a Muslim, as he seeks a third term as London Mayor.
She insisted her comments were "misinterpreted".
At a Friends of Israel event at the Tory Party conference in Manchester on Monday, Ms Hall said: "I live in north London and I know the wealth and joy of the (Jewish) community.
"But I tell you something else, I know how frightened some of the community is because of the divisive attitudes of Sadiq Khan.
"One of the most important things we can do when I become mayor of London is make it safer for everybody, but particularly for our Jewish community."
The comments were widely criticised by Jewish groups, including the Board of Deputies, and Ms Hall's Labour rivals.
Ms Ghani warned that the rhetoric could harm the party at the next election.
She told a Tory Party Conference fringe event: "Have we not learned anything from Zac Goldsmith's similar attempts in his mayoral campaign which ended in abject failure?
"To get the Board of Deputies to issue a statement to slap that comment down shows these comments do not work, especially when they attract such condemnation from the people that you are purporting to support."
Ms Hall has been urged to retract the "divisive" remarks as the Jewish leaders said there is "no fear present at all" in the community.
Labour MP Dame Margaret Hodge, who is Jewish and represents Barking, said that "this dog-whistle politics is beneath us all", adding: "If she had any integrity, Susan Hall would immediately retract her remarks."
But Ms Hall said she had been misunderstood.
"I didn't say that," she said. "I said Jewish people are frightened on our streets. And I will never apologise for standing up for the Jewish community. I regret people misunderstand what I say."
