More than 100 out of 229 Labour MPs signed a statement saying the decision was a betrayal of the party's values and was "not done in our name".
Current Labour London Mayor Sadiq Khan added to growing calls Thursday for Livingstone's expulsion.
Conservative Prime Minister Theresa May weighed in, saying Labour had plunged to new lows.
Labour had "revealed the depths to which it has now sunk, betraying the Jewish community in our country by letting Ken Livingstone off the hook", she said in a party campaign speech.
The disarray comes ahead of the May 4 local authority elections in Britain, with Labour trailing badly in the opinion polls.
Livingstone, 71, was suspended in April last year after saying on a radio show that when Hitler won power in Germany in the early 1930s, "his policy then was that Jews should be moved to Israel. He was supporting Zionism before he went mad and ended up killing six million Jews".
On Tuesday, the NEC formally suspended him for two years backdated to last April, meaning he cannot stand in parliamentary or local authority elections -- which he was not seeking to do.
'Telling the truth'
An unrepentant Livingstone, who was London's mayor from 2000 to 2008, insisted he had not brought the party into disrepute, which he said was the chief reason behind his suspension.
"Should someone be disciplined for stating a historical truth?" he asked.
Livingstone said he believed the NEC decided to suspend him because they thought they could not win a threatened judicial review if they expelled him.
Chief Rabbi Ephraim Mirvis said Labour had failed Britain's Jews.
"This was a chance for the Labour Party to show that it would not tolerate wilful and unapologetic baiting of the Jewish community," he said.
"The party has yet again failed to show that it is sufficiently serious about tackling the scourge of anti-Semitism."
The Livingstone row overshadowed the launch of Labour's local elections campaign.
Livingstone is a long-time ally of fellow veteran leftist Jeremy Corbyn, the Labour leader, and claims restive Labour MPs were trying to undermine Corbyn by attacking him.
Corbyn said Wednesday that the NEC would launch a new probe into Livingstone's unrepentant behaviour since Tuesday's decision.
"What he said was unacceptable and was offensive to the community," said Corbyn.
"I'm asking him to apologise for offences he has caused but also to desist from this public debate on these issues and recognise that we need to oppose anti-Semitism, as we do any form of racism."