Jeremy Corbyn has confirmed he is in discussions about creating a new leftwing political party, hours after the MP Zarah Sultana announced she was quitting Labour to co-lead the project.

Sultana, the MP for Coventry South who had the Labour whip suspended last year for voting against the government over the two-child limit on benefits, said on Thursday night she was quitting Labour and would “co-lead the founding of a new party” with Corbyn.

Her announcement took some on the left of Labour by surprise and was seen as premature and potentially counterproductive.

While Corbyn has long hinted at plans to establish a more organised platform for leftwing and pro-Palestinian campaigning, he has so far avoided confirming any formal structure or leadership arrangements.

Corbyn, the MP for Islington North, is understood to be reluctant to take on the title of leader, as he has a preference for collective decision-making, and he believes imposing a hierarchy too soon could risk fragmenting the coalition of like-minded MPs he has spent months encouraging to work together.

In a statement on X, Corbyn, who was blocked from standing for Labour at last year’s election and was suspended from the party in 2020 for his response to its antisemitism report, on Friday congratulated Sultana “on her principled decision to leave the Labour party”. He also expressed his delight that “she will help us build a real alternative”.

“The democratic foundations of a new kind of political party will soon take shape,” he continued. “Discussions are ongoing – and I am excited to work alongside all communities to fight for the future people deserve.

“Together we can create something that is desperately missing from our broken political system: hope.”

A Labour source said: “The electorate has twice given its verdict on a Jeremy Corbyn-led party.”

John McDonnell and Diane Abbott said on Friday they would not be signing up to a new party.

Sultana’s departure from the Labour party makes her the sixth member of the Independent Alliance of non-party-aligned MPs, which includes Corbyn, giving the group a bigger presence in the Commons than the Greens and Plaid Cymru.

Polling conducted by More in Common shows a leftwing bloc focused on Gaza, poverty and the cost of living could attract about 10% of Labour’s 2019 supporters in urban seats. Alliance insiders understand there could be overlap with the Green party, but believe they have different electorates in different parts of the country.

Reform UK figures welcomed the prospect of the leftwing vote splintering further.

At the Spectator summer party on Thursday night, news of Sultana’s resignation and talk of a new left alliance prompted a cheer from some of the Reform guests milling around the garden. “They’ll take 10% off Labour,” one of them predicted, half joking.

Meanwhile, the Green party has ramped up its social media campaigns urging disgruntled voters on the left to join it and vote in the forthcoming leadership election.

Sultana is seen by allies as one of the left’s most visible figures. Some around Starmer had quietly hoped before her suspension that she might help Labour connect with younger voters and communities angry over issues including Gaza.

The atmosphere within the alliance this week has been described as feeling calmer than it looked. A meeting hours before Sultana went public was painted as constructive with no serious bust-ups. Insiders said Corbyn’s silence for about 18 hours after Sultana’s statement should not be seen as a sign of a split between the two.

On Thursday night, Sultana posted a statement on X, which said: “Westminster is broken but the real crisis is deeper.” The “two-party system offers nothing but managed decline and broken promises”, she added.

On Friday, the home secretary, Yvette Cooper, dismissed Sultana’s accusations, and said the former Labour MP had always “taken a very different view to most people in the government” on several issues.

In a series of broadcast interviews, Cooper refused to be drawn on whether she was concerned the new party could post a threat to Labour.

The reaction to Sultana’s announcement has been mixed on Labour benches, with those on the party’s left sad to see her leave and some celebrating her departure.