Aaron Bastani, a far-left commentator known as one of Jeremy Corbyn's "attack dogs", even claimed that commemorating dead soldiers is RACIST.
Labour moderates including deputy leader Tom Watson hit back and accused him of deliberately trying to offend voters.
Mr Bastani runs a website called Novara Media where he pumps out aggressive videos pushing Mr Corbyn's message.
He used the run-up to Armistice Day this week to criticise the poppy appeal and the Royal British Legion.
Mr Bastani tweeted: "Absolutely sickening that as a country Britain spends £45million on poppies to feel good and help a worthy cause while 13,000 ex-veterans are homeless.
"When was the last time the Royal British Legion challenged the government on homelessness and public services? Joke."
He added that the Legion should be wound up and its assets given to the homeless.
And in a Novara video, Mr Bastani ranted: "We all know about the poppy appeal, it's a bit of a joke for people on the left.
"I think the poppy appeal is grotesque, it has a kind of triumphalist militarism to it… it's racist, right, it's white supremacist."
He also slammed Prince Harry's Invictus Games, a competition for war veterans, as a "PR stunt for the royal family".
Labour deputy leader Mr Watson savaged the far-left activist for his lack of respect for Britain's veterans.
He told The Sun: “I’m sure I speak for the vast majority of Labour party members when I say Mr Bastani’s comments are not just factually incorrect but disrespectful to the Royal British Legion who work tirelessly for our veterans.
"Making the comments so close to Remembrance Day is an attempt to sow dissent when the country is uniting in remembering the service, valour and sacrifice of the men and women of our Armed Forces."
MP John Mann added: "This ignorant man needs throwing out of the Labour party today."
Mr Bastani, a regular guest on the BBC, is one of a group of left-wing journalists believed to have links with Mr Corbyn's office.
The allies are thought to co-ordinate their interventions to help promote Labour's left.
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