An LGBT+ advisory board is being set up, which will meet for the first time in February, to help shape the party’s approach to gay and transgender issues, Dawn Butler said.
The Brent Central MP said she believed there was no need to “make a big fuss” about people who transition and they should be allowed to be their “true authentic self”.
But the issue has already proved a flashpoint at grassroots level after the election in Rochester and Strood of Labour’s first transgender women’s officer angered some feminist campaigners.
Ms Butler insisted the new board includes a range of members who “don’t all agree” so the party can get to grips with the sometimes complicated issues.
In an interview with The House magazine, she said: “We will be taking guidance and advice from people who are LGBT+ – who don’t all agree – round the table, because they are not a homogeneous group who all agree on one thing or another.
“You need people who have lived experiences in order to make informed decisions.
“We will take each step at a time. I think if a trans woman wanted to be included in an all-women shortlist then that should be considered.
“I just don’t think people really need to make a big fuss about it. I mean if one of my team members came into the office and decided that James wanted to be called Jane and was now a woman I would not say ‘prove it, what do you mean?’ I would just accept where he is and his journey or where she is and her journey and that she is being her true authentic self.
“This is a very complicated subject actually and there’s two ways to look at it to be fair.
“I am in favour of equality. I don’t really care how people want to live their lives, if they are not hurting anyone then equality is equality and you should fight for somebody else’s rights as strongly as you fight for your own because that is how we get true equality. For me I want people to be their true authentic self whatever that may be.”
Theresa May has promised to “streamline and de-medicalise” the process of changing gender and called for trans people to be shown “understanding and respect”.
It is understood that under Labour’s selection procedures trans women can stand on all-women shortlists.
Additional reporting by the Press Association