A schizophrenia jibe hurled at a political opponent by the leader of Birmingham City Council was delivered in the heat of the moment and did not breach the local authority's code of conduct, the local government standards watchdog has ruled.

Comments by Mike Whitby had the potential to breach rules requiring councillors to treat each other with respect but were not "excessively abusive" enough to justify a formal investigation, according to the Standards Board For England.

The board had been asked to intervene by a former director of mental health services in Birmingham following a stormy council budget meeting, at which Coun Whitby (Con Harborne) suggested Labour councillor Marj Bridle might be suffering from "schizophrenia, delusion and amnesia".

In a written judgement, Lucy Morris, acting head of referrals at the standards board, said Coun Whitby's remarks could amount to a potential failure to treat with respect those members to whom the comments were directed.

However, she added: "It was also noted that the reported comments were made during the heat of a political debate, and were also made along party political lines. It is recognised that in such situations members are likely to resort to name-calling, abusive heckling and similar behaviour.

"Typically, the Standards Board for England will not refer such allegations for investigation unless extreme or excessively abusive conduct is disclosed."

John Pearson, a former programme director of mental health services in South Birmingham, who lodged the complaint against Coun Whitby, said he would appeal against the decision not to investigate. Mr Pearson, who lives in Kings Norton, said he believed the board's decision was "irrational".

He believes Coun Whitby's remarks were part of a pre-planned strategy by the council's Conservative-Liberal Democrat coalition to portray Labour councillors as mentally ill.

A spokesman for Coun Whitby said: "We welcome the decision by the standards board. This is now the end of the matter."