Luciana Berger, Chuka Umunna, Ann Coffey, Chris Leslie, Angela Smith, Gavin Shuker and Mike Gapes have quit the Labour Party and will now sit in parliament as a "new independent group of MPs".
Mr McDonnell also revealed that Labour would "look at" a proposal put forward by backbenchers Peter Kyle and Phil Wilson to back a second Brexit referendum in the next round of votes on February 27.
It said it amounted to 0.1 per cent of its membership but added: 'One anti-Semite in our party is one too many'.
A group of the party's MPs will make a statement "relating to the future of British politics" on Monday morning. It will make it even more hard than at present for May to get parliamentary approval for her withdrawal deal.
"We represent different parts of the country, we are of different backgrounds, we were born of different generations, but we all share the same values".
Tories are likely wringing their hands, what delicious irony that Brexit destroy the Labour party and not their own.
Ilford South MP Mike Gapes tweeted: "This morning I have resigned from the Labour Party after fifty years".
"I can not remain in a party which I have come to the sickening conclusion is institutionally anti-Semitic".
"Jeremy Corbyn, and those around him, are also on the wrong side of so many global issues from Russian Federation, to Syria, to Venezuela".
In September, the ruling National Executive Committee adopted the International Holocaust Remembrance Alliance's definition in full, after coming under attack for initially omitting some of its examples of anti-Semitic behaviour. The Labour Party has lost sight of this, it is no longer a broad church.
"Any criticism of the leadership is responded to with abuse and accusations of treachery".
Chukka Umunna called on MPs from other parties to join their movement.
The MP for Streatham in London said: "We invite you to leave your parties and forge a better politics".
Taking to the podium next, Chris Leslie highlighted Labour's Brexit position - "Labour's betrayal on Europe" - and the foreign policy stances of Jeremy Corbyn.
The now chief executive of UK Music said: "I will continue to have lots of dear friends in the Labour Party, including many talented MPs and hard-working local councillors who are fantastically dedicated public servants".