Shami Chakrabarti, who led an investigation into allegations of antisemitism in the Labour Party, has accepted a peerage from Jeremy Corbyn.
She was nominated by the Labour leader and is elevated to the House of Lords just five weeks after completing her inquiry.
The Community Security Trust, which monitors antisemitism in Britain, said the move was "a shameless kick in the teeth for all who put hope in her now wholly compromised inquiry into Labour antisemitism".
Chief Rabbi Ephraim Mirvis said the credibility of Ms Chakrabarti's report "lies in tatters".
Ms Chakrabarti said: "I am honoured to accept Jeremy Corbyn’s challenge and opportunity to help hold the government to account. This is a dangerous moment for our country and we share vital human rights values that need defending more than ever before in my lifetime.”
A spokesman for Mr Corbyn added: "Shami Chakrabarti shares Jeremy’s ambition for reform of the House of Lords. Her career has been one of public service and human rights advocacy.
"Her legal and campaigning skills, and the trust that she has gained from many ordinary Britons, will be a considerable asset to the House of Lords. Brexit will put many hard-fought rights at risk, so it is crucial that those equipped with the right skills are given the opportunity to hold this Government to account."
Asked by the JC whether her appointment to the Lords undermined the credibility and independence of the antisemitism inquiry, Mr Corbyn's spokesman said Ms Chakrabarti was "an ideal appointment to the Lords".
The Board of Deputies said Ms Chakrabarti's peerage was "beyond disappointing". It said her "so-called 'independent' inquiry" was "weak in several areas" and had now been "rewarded with an honour".
Marie van der Zyl, Board vice-president, called it a "whitewash for peerages scandal" that raised questions about the integrity of Ms Chakrabarti and the Labour leadership.
Rabbi Mirvis said: "Shami Chakrabarti has a proud record of public service, but in accepting this peerage, the credibility of her report lies in tatters and the Labour Party's stated intention, to unequivocally tackle antisemitism, remains woefully unrealised."
John Mann, chair of the All-Party Parliamentary Group Against Antisemitism, said Mr Corbyn was guilty of "appalling hypocrisy".
Wes Streeting, Labour MP for Ilford North, tweeted: "Shami Chakrabarti will bring great experience to the Lords. But let's not pretend that a Labour peerage in these circumstances doesn't stink."
Labour Friends of Israel said the nomination "clearly undermines the independence of her inquiry".
Jewish cross-bench peer Baroness Deech said: "The Chakrabarti report was intellectually flabby and self-serving. We now have to pin our hopes on the Commons Home Affairs Select Committee Inquiry. The Labour Party is irredeemably tainted by its tolerance of hate and state of denial."
Ms Chakrabarti receives a life peerage. She had previously revealed that she had joined Labour on the same day that Mr Corbyn appointed her to lead the investigation.
He had in the past said he would not nominate people for peerages, but Ms Chakrabarti is included as the only Labour representative on the list of resignation honours published following David Cameron's departure as Prime Minister.
The award of the peerage is likely to lead to further criticism of her role as chair of Mr Corbyn's inquiry into antisemitism.
No official explanation was listed for the decision to award her the peerage.
Asked by the JC last month, Ms Chakrabarti had refused to confirm or deny that she would stand to become a Labour MP in the future.
Oliver Letwin has been knighted for his role in Mr Cameron's government and for his years of political and public service.
