Graeme Currie, who contested the seat as recently as the 2019 general election, was informed on Saturday that he would not be in the running for next month's poll, triggered after the resignation of Conservative MP Owen Paterson.
It was announced on Sunday that 26-year-old Oswestry man Ben Wood would contest the seat for Labour.
Mr Currie, who has been a member of Labour for more than 40 years, feels he has been unfairly judged for social media posts in support of Palestine. He called the local executive committee "Stalinist" and said the party has "a corruption in its soul".
In a lengthy statement, he said: "Yesterday the Labour Party National Executive Committee (NEC) blocked my inclusion onto the North Shropshire local members hustings to shortlist for the upcoming by-election candidate. This hustings is taking place today [Sunday].
"Under the guise of 'due diligence' they raised spurious concerns regarding a tweet in 2018 of a Palestinian badge and a Facebook post in 2020 where I quoted Jeremy Corbyn calling for calm following the Equalities Commission’s report on findings of Institutional anti-Semitism in the Labour Party.
"I consider I have been unjustly slurred as anti-Semitic. I abhor this slur and I am devastated and disgusted.
"I have been a member of the Labour Party since 1980, have held various elected positions and previously been the North Shropshire parliamentary candidate for the past three general elections.
"These baseless and unfounded assertions under the guise of 'due diligence' are grossly upsetting to me. I consider that the kangaroo court of the NEC shortlisting committee has interfered in local party members' choices and ability to fairly select a candidate.
I am not sure I am even a member anymore— Graeme Currie (@graeme_currie1) November 14, 2021
I express my sadness, anger and revulsion at this unfair and undemocratic treatment! I will not be able to campaign now or probably ever again for the Labour Party. I am devastated and destroyed by the casual horror of my treatment by NEC
"My support for Corbyn when he was elected Labour Party leader is in my opinion a factor in my removal from the candidates shortlist. These Stalinist tactics of the NEC flies in the face of the calls for unity within the Labour Party. I am now an outsider in my own party where I have campaigned and fought for many years alongside my fellow party members for a more equal, socially just and non-discriminatory society.
"To feel I cannot be part of this anymore - Labour has a corruption in its soul.
"I feel betrayed and abused by the NEC who have rejected me on spurious and unfair grounds and have prevented local members from a consideration of my suitability. I was committed to supporting whoever was selected alongside local members but now I will be unable to campaign for Labour. I am not sure I am even a member anymore.
"I express my sadness, anger and revulsion at this unfair and undemocratic treatment.
"I will not be able to campaign now or probably ever again for the Labour Party. I am devastated and destroyed by the casual horror of my treatment by this NEC Stasi committee."
On Sunday Mr Currie altered his Twitter biography section to describe himself an "ex-Labour Party member".