Politicians must help eradicate the "double standards" which British universities impose against Israel, it has been claimed.
Lord Grade told a House of Lords debate that "bigotry" was being incited on campuses in Britain and highlighted the funding of academia by what he said were countries with "abhorrent" human rights records.
Tuesday night's debate was scheduled to be on understanding the general situation in the Middle East but was dominated by discussion on Israel and the Palestinians.
Much of the focus was on the "Israel Apartheid Week" activities on British campuses and the investigation into the accusations of antisemitism at Oxford University Labour Club.
A number of speakers railed against the efforts to boycotts Israel and the country's academics.
Lord Grade, the former BBC chairman, led the session and told peers: "There is a blatant double standard here, which we as legislators have not addressed.
"There is evidence that we permit the funding of some educational departments by authoritarian states with abhorrent track records on human rights and free expression, yet UK institutions are somehow at the forefront of calls to ban Israeli academics and students on the basis of their nationality and, probably, their religion.
"The connection between the funding of universities by vehemently anti-Israel regimes, the constraining of free expression and referenda to ban Israelis must be exposed.
"While we in this place advocate free expression and a two-state solution, elsewhere, we permit the clandestine manipulation of research and teaching on the Middle East to the opposite effect."
Lord Grade called for campuses to help lead the way towards peace between Israelis and Palestinians. They should not become, he said "spaces to further entrench differences and incite hostility and, dare I say it, bigotry".
Focussing on concerns about media coverage of the conflict, Baroness Deech, a former BBC governor, accused journalists of "selective omission" in their efforts to report from the region.
She said: "For example, the headlines proclaiming that a Palestinian has been killed, when in fact he was brought down after murdering Israeli civilians in the street.
"That is why it is so important that complaints about the media inaccuracies are handled by independent arbiters, and the BBC has to reform its complaints system."
There was an attack on Labour's leadership from one of the party's own peers, Lord Livermore, who had led former leader Ed Miliband's general election campaign.
Lord John Patten praised the government's efforts to combat boycotts of Israel.
The Conservative peer said the initiative, unveiled in detail last week, to stop local authorities banning the sale and procurement of Israeli goods was welcome.
"I want my local authority to deal with flood prevention and potholes rather than developing their own foreign policy in direct contravention of the rules of the World Trade Organisation with the sole aim of undermining and delegitimising one state and one state only in the Middle East - the state of Israel," he said.
"I say all that not as a Jew but as a Roman Catholic. There are a lot of my lot in Jerusalem and I want them to stay there. I am extremely grateful to the government of Israel for protecting them and for making it possible for Roman Catholics and other Christians to be in Jerusalem and not to be cleansed and cleared out, as they have been in so many other parts of the Middle East."
In his first Lords speech on the Middle East, the Labour Friends of Israel supporter said: "I fear that on the left today what is in jeopardy is support not just for the conduct of Israel but for the concept of Israel.
"We see senior figures praising as friends those who are committed to the violent destruction of the Jewish homeland.
"Indeed, we now have the perverse situation where people who consider themselves to be progressive oppose Israel in the belief that they are standing up for liberal values and human rights, but in doing so side with totalitarian Islamist regimes that abuse human rights and prohibit basic liberties."
There was further condemnation of other parties acting in the region from Lord Beecham, who said he rejected the "moral relativism of those who are loud in their condemnation of Israel but whose protests against the brutality of Hamas, Hezbollah, Assad and his Russian and Iranian backers, or the dictatorial regimes in Saudi Arabia or the Gulf whom we supply with weapons, are rarely audible or visible to the naked eye".
Emeritus Chief Rabbi Lord Sacks suggested Israel as a nation had now taken the place of Jews in being seen as "the bad guys".
"That is not good for the future of freedom in the Middle East," he said. "I urge the government to do all they can to ensure that our institutions of education and information honour the principle that justice involves audi alteram partem, which means, let the other side be heard as well."
Concluding the hour-long debate, Foreign Office minister Lord Maude said: "Whether on campus or elsewhere, British Jews, like all communities, must be able to live their lives free from fear of verbal or physical attack.
"The best way to tackle antisemitism is through effective implementation of strong legislation against racial and religious discrimination."
