MPs were spotted handing over cheques to George Howarth, the former minister running the "Save Woolas" fund, to cover a legal defence which is being assisted by the former Lord Chancellor, Lord Falconer.
The Evening Standard revealed yesterday how Labour MPs staged a furious revolt when deputy leader Harriet Harman declared he would not be allowed to stand again as a Labour MP for allegedly lying about his opponent.
In a major concession, leader Ed Miliband then ruled that Labour will not choose a by-election candidate until after the legal battle is over, giving the former immigration minister a chance of staying on.
Mr Woolas faces being thrown out of parliament unless a rare verdict by an election court that he be barred for three years is overturned on judicial review.
Supporters have asked every Labour MP to stump up £100 to meet a £50,000 legal bill. One is said to have handed over £1,500, such is the strength of feeling against the verdict.
Cherie Blair has sent a message of support and Lord Falconer, a Labour peer, has helped to draft the legal case.
Mr Woolas, an MP since 1995, is popular with Labour backbenchers.
Labour MP Graham Stringer said backbenchers were angry with Ms Harman, who was this afternoon standing in for Mr Miliband at question time.
"The statements that were made over the weekend by the leadership of the party were unbalanced and didn't recognise Phil's major contributions to the Labour party and the Labour government over the last 13 years," he told the BBC.
"Just to write him off when it appears that he still had the right of appeal seemed unfair and unbalanced. I am sure Harriet said what she thought at the time. I wish she hadn't said it."
Ex-whip David Watts said: "With due respect to Harriet she isn't we, the Labour Party.'"
A Labour Party spokesman said: "The Labour Party administratively suspended Phil Woolas following the judgment of the election court."
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