Welsh Labour has been forced to apologise for publishing an "inappropriate" leaflet that exploited prejudices against Gypsies and Travellers.

The move came after the Commission for Racial Equality said it had "deep concerns" about the pamphlet.

It had emerged that the offending leaflet was published in the Llanedeyrn and Pentwyn wards in Cardiff during last June's local election campaigning.

The leaflet attacked the Liberal Democrats for their policy on local authority provision of sites for Travellers.

According to the CRE, it breached the agreement between the four Welsh assembly parties to discipline any members campaigning in Wales that could stir up racial prejudice.

Following an inquiry established by the Welsh Labour executive, the party said that party officers outside the ward had been unaware of the leaflet prior to its distribution.

"The leaflet dealt with the issue of Travellers sites in a totally inappropriate manner," it admitted.

"Welsh Labour believes that, where such issues are raised in political debate, it should be done responsibly and as a means of addressing prejudice, not pandering to it.  It is acknowledged that the leaflet breaches the cross-party concordat on these issues.

"Welsh Labour apologises that the leaflet appeared in the name of the party and that its distribution, however limited, was not prevented."

The statement also said that the party "censures the individuals involved and rebukes them for their part in the leaflet's production and distribution".

"It is anticipated that the individuals concerned will subscribe to the apology made by the Welsh executive. The executive reserves its right to pursue further disciplinary action through the national party should they fail to do so."

And the party added that it would work to "safeguard against any material of this nature appearing on behalf of Welsh Labour in the future".

The CRE welcomed the statement, but said the leaflet had been a "disgrace".

"It flew in the face of Labour’s stated commitment to anti-racism," said the CRE's commissioner for Wales, Cherry Short.

"The forthright statement by the Welsh Labour executive on this issue is to be welcomed.

"The party now needs to put in place the kind of measures which can ensure that all members of the party know that such campaigning activities are wrong."

Short added that there were also lessons for other parties to learn from the incident.

Jenny Randerson, the Lib Dem AM for Cardiff Central, welcomed the CRE's move.

She added that the leaflet "promoted fear and hatred in the area, despite the fact that all the party leaders had signed up to an agreement not to play the race card during the election campaign".