The Labour leader was challenged by some of his own MPs over his response to a Facebook post by the street artist Mear One about the plan to paint over the work.
Mr Corbyn’s response suggested the artist was “in good company” because the Rockefeller family had covered over a mural featuring Lenin in their New York development.
In his post responding to the imminent destruction of the mural, Mr Corbyn said: “Why? You are in good company. Rockerfeller (sic) destroyed Diego Viera’s mural because it includes a picture of Lenin.”
It is understood that at the time of the post in 2012, Mr Corbyn did not condone the artwork but was expressing concerns about free speech.
A spokesman for Mr Corbyn said: “In 2012, Jeremy was responding to concerns about the removal of public art on grounds of freedom of speech.
“However, the mural was offensive, used anti-Semitic imagery, which has no place in our society, and it is right that it was removed.”
The mural, in east London, was painted by Mear One - whose real name is Kalen Ockerman - and depicted a group of businessmen playing a Monopoly-style game on a board balanced on the backs of people.