Jeremy Corbyn said “real change is coming” as he announced the start of a new left-wing party with ex-Labour MP Zarah Sultana.
Ms Sultana, who had the Labour whip suspended last year, said on Thursday night that she would be co-founding the movement with the Islington North MP.
But there was speculation Mr Corbyn had been blindsided by the announcement when he did not make any comment.
On Friday afternoon he released a statement in which he said he was “delighted” Ms Sultana would “help us build a real alternative” but added that discussions were "ongoing".
“Real change is coming,” he said.
“One year on from the election, this Labour government has refused to deliver the change people expected and deserved.
“Poverty, inequality and war are not inevitable. Our country needs to change direction, now.
“Congratulations to Zarah Sultana on her principled decision to leave the Labour Party... The democratic foundations of a new kind of political party will soon take shape.
“Discussions are ongoing - and I am excited to work alongside all communities to fight for the future people deserve.
"Together, we can create something that is desperately missing from our broken political system: hope."
It comes as government whips are expected to object to Mr Corbyn’s Bill calling for an independent inquiry into the war in Gaza, which is due in the Commons on Friday.
Independent MPs Ayoub Khan, Adnan Hussain, Shockat Adam and Apsana Begum were among those who co-signed the Bill.
They argue that there are issues regarding the UK’s involvement in what they describe as a genocide by the Israel Defense Forces (IDF) in the Palestinian enclave that have not been properly aired in Westminster.
Middle East minister, Hamish Falconer, has previously said the government does not agree there is a need for an inquiry and the role of UK military operations in relation to Gaza has already been set out.
Sources close to Mr Corbyn said further steps would be laid out next week and could include the launch of a privately funded inquiry.
On Friday morning, the Home Secretary declined to be drawn on whether she was concerned a new left-wing party could pose a threat to Labour.
Yvette Cooper told LBC: "People have always had different views, and I just disagree with the views and the approaches they're taking."
In her announcement, Ms Sultana accused the Labour Government of failing to improve people's lives and claimed it "wants to make disabled people suffer" in reference to ministers' proposals to reform welfare.
Ms Cooper rejected the accusation, telling Sky News: "I just strongly disagree with her."
The Home Secretary pointed to falling waiting times in the NHS, the announcement of additional neighbourhood police officers, extending free school meals and strengthening renters' rights as areas where the Government was acting.
She said: "These are real changes (that) have a real impact on people's lives."
Ms Sultana was one of seven MPs who had the Labour whip suspended last summer when they supported an amendment to the King's Speech which related to the two-child benefit cap.
Four of the seven had the whip restored earlier this year but Ms Sultana was not among them.
John McDonnell, another of the suspended MPs who has not had the whip restored, posted on X that he was "dreadfully sorry" to see Ms Sultana quit the party.
"The people running Labour at the moment need to ask themselves why a young, articulate, talented, extremely dedicated socialist feels she now has no home in the Labour Party and has to leave," he said.
Mr Corbyn led Labour from 2015 to April 2020, stepping down after the party's loss at the 2019 general election.
He was suspended from Labour in 2020 and expelled in the spring of 2024 after announcing he would stand as an independent candidate in his Islington North constituency, which he won with a majority of more than 7,000 votes.
Last year, Mr Corbyn formed the Independent Alliance with other independent members of the Commons.
Asked on ITV's Peston programme on Wednesday whether that group could turn into an official party, Mr Corbyn said that they have "worked very hard and very well together" over the last year in Parliament.
He added: "There is a thirst for an alternative view to be put."
"That grouping will come together, there will be an alternative," he later said.
