Watson pointedly praised former party officials who broke non-disclosure agreements on the Panorama programme about interference by the leader's office in investigations into antisemitism claims.
Lord Triesman, a former Labour general secretary and foreign office minister, said the party and its leadership are "institutionally anti-Semitic", while Lord Darzi and Lord Turnberg also quit the Labour whip.
Emails from May 2018 show Formby sought to influence the selection of the panel for a disciplinary hearing for a party member accused of making racist comments on social media.
Iain McNicol also spoke out against the party on the programme.
"In line with those, the Labour Party has been given the opportunity to respond to the allegations". Too many eyes all on my Labour address.More news: Lata Mangeshkar bats for MS Dhoni
Whistle-blower Dan Hogan, a former investigator on Labour's dispute team, also accused Formby of overreach.
He alleged people she had brought in since her appointment "overruled us and downgraded what should've been a suspension to just an investigation or worse to just a reminder of conduct, effectively a slap on the wrist".
Former head of disputes Sam Matthews said he interpreted an email from Mr Milne as "not a helpful suggestion" but as "an instruction".
"Something's going wrong and we're muddling up political disputes with racism", he reportedly wrote. "I think going forward we need to review where and how we're drawing the line", Milne wrote to Matthews and several others. On Monday broadcaster Channel 4 published a survey of 892 Conservative Party members by pollsters YouGov which showed that 56% believed Islam was a general threat to Britain's way of life.
The party is now being investigated by the Equalities and Human Rights Commission after a number of complaints about anti-Semitism. We will be pursuing complaints at every level. Many of those interviewed by Ware "have always opposed Jeremy Corbyn's leadership, worked to actively undermine it, and have both personal and political axes to grind", the Party stated, questioning their credibility as sources in such an investigation.
"He actually laughed at me..."More news: Aston Villa complete signing of Brentford defender
"It showed interference in what is supposed to be an independent process".
"Thirdly - and this is a cultural and attitude issue - now the Equality and Human Rights Commission is looking at the Labour Party, we should throw open the books and say "you've got access to anything, you have got access to any member of staff, we have made some process changes which have improved things but we have still got a problem, help us through this".
The Party slammed the BBC's choice of producer, John Ware, as "unsuitable", noting that Ware's "record of public political hostility to Jeremy Corbyn and his leadership of the Labour Party, as well as a series of controversial articles and programs on the Muslim community, means he can not be regarded as fair or even-handed on British politics".
Mr Smith told BBC Wales he was "sad and ashamed" by the claims. "Mr Corbyn's support for anti-Semites and his team's protection of anti-Semites demonstrate that Mr Corbyn himself is an anti-Semite who is unfit to hold any public office".
Following the release of the film, Labour Against Anti-Semitism, an internal party group, said in a statement that the reputation of the Labour Party "has been shredded by a Hard Left establishment that has proven apparently incapable of addressing the endemic racism within" and that "their reign must be quickly and efficiently ended".
And he said he and the shadow cabinet had been denied access to information on the scale of the problem and the party's official response to an investigation by the equalities watchdog into how Labour handles allegations of antisemitism.More news: Presenting Bentley's Most Daring Concept Ever: The EXP 100 GT