His rivals Angela Eagle and Owen Smith need the backing of 51 MPs or MEPs.
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British Opposition Labour Party leader Jeremy Corbyn smiles as he meets supporters and members of the media after attending a meeting of Labour’s National Executive Committee in London on July 12, 2016.
“I will stand in this election and I will do a decent thing and fight Jeremy Corbyn on the issues… and at the end of that I will stand behind whoever the leader is but I hope and I expect it will be me”.
Labour deputy leader Tom Watson said: “This legal challenge is very unhelpful and destabilising to the Labour Party”.
The victor of the contest, which will formally get underway with an announcement of the timetable on Thursday, is expected to be crowned in September.
The EU referendum sparked a wave of resignations from Corbyn’s policy team with many saying that he did not campaign hard enough to prevent Brexit, and culminated in the passing of a motion of no-confidence in him by a margin of 172 to 140.
The NEC made the decision by secret ballot during a meeting at Labour’s Victoria headquarters on Tuesday afternoon, which Corbyn attended.
Michael Foster, whose family is reported to have donated £400,000 to Labour’s general election campaign, wants the Labour leader to have to secure the support of 51 MPs, the minimum needed for any challenger.
Supporters in Mr Smith’s constituency have backed him to bring together the “battling wings” of the Labour Party.
“I’m in this contest to win it and that’s what I intend to do”.
As Labour teetered on the brink of all-out civil war, Mr McDonnell won loud cheers at a pro-Corbyn fundraising event as he denounced those seeking to force a change at the top of the party.
Corbyn’s victory a year ago was attributed to a surge of new party members who signed up for £3 ($4, 3.60 euros) to vote in the leadership race.
Ms Eagle has urged Mr Corbyn to rein his supporters in.
Foster said he did not vote for Corbyn in the last leadership election but said the rules should not be bent to a particular political circumstance, and should be arbitrated by a neutral body.
The group’s spokesman James Schneider told BBC radio that they will “take advice on whether that would be allowed” and confirmed that they are looking at the possibility.
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“It is extremely concerning that Angela Eagle has been the victim of a threatening act and that other MPs are receiving abuse and threats”, Corbyn said in a statement.
