Sir Keir Starmer has branded comments made by a Labour MP about the Chancellor being "superficially black” as racist.
The Labour leader said Rupa Huq's remarks about Kwasi Kwarteng were "wrong".
The Ealing Central and Acton MP was suspended by the party on Tuesday after her comments emerged.
Sir Keir told LBC: "What she said in my view was racist, it was wrong and she's been suspended from the whip in the party and that was done very, very quickly.
"I think that tells you how strongly I feel about those comments.
"She shouldn't have said it. She will be dealt with and I'll be absolutely clear it was racist."
Sir Keir said it was not his personal decision to suspend her but "it's a decision I absolutely agree with" and the MP would now face an investigation.
On Monday, Ms Huq told a fringe event at the Labour Party Conference in Liverpool that the Chancellor was “superficially a black man".
She said: “He went to Eton, I think, he went to a very expensive prep school, all the way through, the top schools in the country.
“If you hear him on the Today programme, you wouldn’t know he is black.”
After her suspension, Ms Huq apologised and described her comments as "ill-judged".
"I have contacted Kwasi Kwarteng to offer my sincere and heartfelt apologies for the comments I made at yesterday's Labour conference fringe meeting," she said.
"My comments were ill-judged and I wholeheartedly apologise to anyone affected."
