Dawn Butler, shadow equalities secretary, told Sky News that Commonwealth citizens were being made to “relive” the trauma of the “no blacks, no Irish, no dogs” days.
She issued Labour’s strongest criticism yet as pressure grows on the Prime Minister and Home Secretary over the Windrush scandal.
Asked on Sky’s Sunday with Niall Paterson whether Mrs May could personally be accused of racism, Ms Butler said: “Yes.
“She is the leader that’s presiding over legislation that’s discriminating against a whole group of people who came from the Commonwealth, who suffered racism when they came over, the ‘no blacks, no Irish, no dogs’.
“And now they’re having to relive that trauma all over again because of Theresa May.
“She’s not going to get let off the hook on this. And this has to be redressed as quickly as possible.
“Just saying stuff isn’t good enough. I need to see action and I need to see action quickly.”
Asked to clarify if she was calling Mrs May a racist, the Brent Central MP said: “In my own personal opinion, and I’m speaking as myself as Dawn Butler, the daughter of Jamaican parents, I’m saying that Theresa May has presided over racist legislation that has discriminated against a whole generation of people from the Commonwealth.
“Her policies that she has implemented have disproportionately affected people from the Commonwealth and people of colour and therefore if you look at what institutional racism is, that’s what her policies are currently delivering.
“Theresa May has to not only reconsider her position but she has to reconsider her policies. And an apology is not good enough.”
Ms Butler doubled down on her remarks in a tweet, saying: “Sadly it is true.
“From the ‘Go home’ racist vans to the hostile environment to the political austerity measures to the new identification to vote. I will be publishing my article next week.”
Downing Street has been approached for comment.
Ms Butler also blasted the hotline set up to help those affected, saying it was being staffed by “inexperienced” people from a call centre.
“It’s inappropriate and not good enough,” she said.
It came as Jeremy Corbyn blamed Mrs May for setting a “deliberately unreachable bar” for Windrush citizens and their children by creating a “hostile environment” policy.
“We’re now seeing the consequences in a string of harrowing human stories – people’s lives ripped apart because of the personal decisions and actions of Theresa May and her Government,” he told a Welsh Labour conference.
Justice Secretary David Gauke also admitted on Sunday that he was “ashamed” of the scandal.
Earlier this week, Amber Rudd apologised and blamed officials in her own department.
“The Home Office has become too concerned with policy and strategy and sometimes loses sight of the individual,” she said on Monday.
Days later, Mrs May told leaders at the Commonwealth Heads of Government Meeting that she was “genuinely sorry”.
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Baroness Scotland, Secretary-General of the group of 53 nations, told Sky News “many people were greatly encouraged and warmed” by the apology.
“Family fall out sometimes,” she said. “They do things they regret, and then they say sorry. But the great thing about families is that the tend to forgive each other.”