The suspended Labour candidate for the Central Suffolk and North Ipswich parliamentary seat was hosting the shadow chancellor of the exchequer at a business event only a few months ago.

Kevin Craig has expressed deep regret after betting he would lose the contest - and in the process embroiling the Labour Party in a scandal which has engulfed the Conservative Party during its election campaign. 

The local businessman hosted a gathering of about 100 company bosses on February 29 at the Willis building in Ipswich to support his employee, Jack Abbott - the Labour contender for the Ipswich parliamentary seat.

Rachel Reeves, the shadow chancellor, was guest of honour and spoke of her ambitions for growth at the invitation-only event.

Business guests gathered at the Willis building at an event organised by Kevin Craig (Image: Charlotte Bond)

Mr Craig - who is chief executive of Ipswich-based PR and digital marketing company PLMR Genesis - has been administratively suspended by Labour after it was revealed to the party that the Gambling Commission has launched an investigation into him.

During her visit to the Willis building in February, Ms Reeves spoke of her fond memories of Ipswich - due to her triumph as a young teenager at the girls' under-14s British Chess Championship held in the town.

During the evening event, Mr Craig expressed delight at her appearance at the venue and said the Conservative party's unchallenged position in the region was now being challenged.

"I think that's changing. I'm really impressed with her," he said at the time.

Some of the PLMR team and Kevin Craig, second from left, with Rachel Reeves at the business gathering in Ipswich in February (Image: Sarah Chambers)

Mr Craig is a lifetime Labour supporter and his business employs about 100 staff. He has family across Bury St Edmunds, Stowmarket and Felixstowe - and recalled at the event how he stood for the South Suffolk seat back in 2005.

At the time, he took a very cautious approach to the outcome of the election - which had yet to be announced. "I hope that they do (win) but it would be a very foolish person that takes a single thing for granted," he said.

Mr Craig described his actions in placing the bet as "a huge mistake" - but said any winnings were destined to go to charity.

A Labour party spokeswoman said after being contacted by the Gambling Commission the party acted "immediately" to administratively suspend Mr Craig pending investigation.

“With Keir Starmer as leader, the Labour party upholds the highest standards for our parliamentary candidates, as the public rightly expects from any party hoping to serve, which is why we have acted immediately in this case,” she said.

Mr Craig was selected as Labour's candidate to contest the Central Suffolk and North Ipswich seat several months ago - and before then-Conservative MP Dr Dan Poulter's defection to Labour and announcement he would be standing down from the seat. 

In a statement Mr Craig said of his bet: “Throughout my life I have enjoyed the odd bet for fun whether on politics or horses.

"A few weeks ago when I thought I would never win this seat, I put a bet on the Tories to win here with the intention of giving any winnings to local charities.

“While I did not place this bet with any prior knowledge of the outcome, this was a huge mistake, for which I apologise unreservedly.

“I have so much respect for how Keir Starmer has changed the Labour Party and I have been fighting so hard to win this seat and change the country alongside him.

“However, it is right that the party upholds the highest standards for its Parliamentary candidates – just as the public expects the highest standards from any party hoping to serve in government.

“I deeply regret what I have done and will take the consequences of this stupid error of judgment on the chin.

"I am deeply sorry to the many dedicated and loyal local Labour Party volunteers who have been supporting my campaign. I will comply fully with the investigation.”

The BBC has reported that Labour will return the £100,000 donation Mr Craig had previously made to the party.

Mr Craig's suspension comes as Conservative candidates have had their party's support withdrawn after it emerged they were also being investigated by the Gambling Commission.