A three-man committee of the Adjudication Panel for England unanimously found Mr Livingstone guilty of being 'unnecessarily insensitive and offensive' in comparing Jewish Evening Standard newspaper reporter Oliver Finegold to a Nazi concentration camp guard.
The panel decided in February that Mr Livingstone was in breach of the Greater London Authority (GLA) code of conduct and should be suspended for four weeks. The suspension order was frozen pending the outcome of Wednesday's hearing.
The code states that a member must not in his official capacity, or in any other circumstance, conduct himself in a manner which could reasonably be regarded as bringing his office or authority into disrepute.
As Mr Livingstone arrived at London's High Court for the hearing, he commented on 'the lovely weather', adding: 'I have total confidence in British justice.
'It is always a pleasure to come before the court.'
In court, Mr Maurici described to Mr Justice Collins how Mr Livingstone had become embroiled in his current problems after he was approached, while off duty, by Mr Finegold, who was 'doorstepping' a reception at City Hall marking 20 years since former culture secretary Chris Smith became Britain's first openly-gay MP.
Mr Livingstone asked Mr Finegold, who was accompanied by a photographer, whether he had ever been a 'German war criminal'.
On hearing that Mr Finegold was Jewish, the mayor likened him to a Nazi concentration camp guard.
Mr Maurici quoted William Rees-Mogg's comment in The Times that the tribunal's decision was to 'inflate trivial disputes of the late evening into matters of state'.
It had been made 'crystal clear' to the Evening Standard that it had not been invited to the reception, and Mr Livingstone regarded the newspaper's actions as tantamount to harassment of what was a predominantly gay and lesbian event.
The ethical standards officer, who had presented the report which led to the tribunal's finding, had stated that Mr Livingstone had indicated he did not want to be interviewed, said Mr Maurici.
But Mr Finegold, armed with a tape recorder, followed him along the street repeatedly asking him the same question, leading to an 'unwanted' 35-second exchange in which Mr Livingstone 'made a number of remarks aimed at showing his disdain for the Evening Standard and the behaviour of the reporter who approached him after the reception'.
Mr Maurici said there had been 'a long-standing antipathy between the Evening Standard and my client.
'Mr Livingstone has long held well-documented, lawful and, we say, political views as to the association of both the Evening Standard and its owners, Associated Newspapers, with far right-wing politics.
'Mr Livingstone suspected the Evening Standard's motivations for being at the reception in question.'
Mr Finegold, on his own admission, had expected 'joshing' because of the mayor's antagonism.
'A robust relationship is routine and to be expected between tabloid journalists and politicians,' said Mr Maurici.
The newspaper did not consider the incident of sufficient importance to report the matter, but a complaint was made by the Board of Deputies of British Jews.
The ethical standards officer, having investigated, considered the matter was not sufficiently serious to refer the matter, but 'considered himself constrained' to send it to the case tribunal.
Mr Maurici said: 'The tribunal's finding that what was said by Mr Livingstone was of sufficient gravity as to bring the very office of mayor of London into disrepute is wholly untenable.'
The board of deputies had made it clear that it never intended suspension to result from its complaint.
Mr Livingstone also enjoyed public support.
'Some people take the view they would have preferred Mr Livingstone not to use the words that he did.'
But it was also true that Londoners supported his expression of his view. Even those who would have preferred that he had not expressed himself as he did nevertheless supported his right to freedom of speech as 'a colourful politician expressing forthright views'.
Today's case is a statutory appeal in which Mr Livingstone is asking the High Court to quash the tribunal's decision against him on the basis that its members went wrong in law and made erroneous findings or failed to draw proper inferences from the evidence of his encounter with Mr Finegold.
Even before the start of today's hearing, expected to last three to four days, Mr Livingstone faced a legal bill estimated to have topped£80,000.
But he has vowed to fight the case all the way to the House of Lords if necessary, even though it could cost 'hundreds of thousands of pounds' if he loses.
He has also accused the Board of Deputies of British Jews of making the original complaint only to try to 'hush' him up over his views on the Middle East and the need for 'a viable Palestinian state' alongside Israel.
He has repeatedly insisted that he was using his freedom of expression and had never meant to offend the Jewish community or downplay the Holocaust.
Jon Benjamin, of the Board of Deputies of British Jews, denied there was a witch hunt against Mr Livingstone and suggested the Mayor was 'really just trying to spin this and create a smokescreen to justify what he did'.
During legal argument today, the judge observed that Mr Livingstone's remark was 'clearly offensive and intended to be so', but that did not make it a breach of the code of conduct.
The judge said he could understand Mr Livingstone taking a rather extreme view in doubting the good faith of the newspaper in reporting on the reception.
Mr Livingstone did not like the Standard or the Daily Mail and was entitled to take the view that their politics were very much to the right.
'They have obviously troubled him in the past and he was using somewhat extreme language which perhaps he would not have used if he had not been caught on the hop,' the judge said.
He suggested that Mr Livingstone had spoken his mind in forceful terms 'while his brain was not fully engaged'.
Counsel said he was not sure his client would agree with that. The judge said Mr Livingstone, known for making forceful observations, was saying that the reporter was no better than those who argued they were only following orders.
'I don't want anyone to suggest that Mr Livingstone is anti-Semitic,' Mr Justice Collins stressed.
'There has never been any indication of that. That is absolutely clear. No-one can think he was making a remark like that because of anti-Semitism.'
Before the start of today's hearing, London Assembly chairman Brian Coleman called on Mr Livingstone to 'say sorry' for his remarks to Mr Finegold.
Mr Coleman said: 'It is deeply regrettable that the GLA's work to oppose anti-Semitism is being overshadowed by the Mayor's remarks to Oliver Finegold and the offence those comments have caused.
'Rather than finding himself in court today, Ken Livingstone should have heeded the Assembly's unanimous call in February last year to apologise and withdraw his remarks immediately.
'It is sad that, for the Mayor, sorry seems to be the hardest word.' The London Assembly is an elected body, part of the Greater London Authority, that scrutinises the Mayor's activities.
Mr Livingstone has said in the past: 'I have no intention of apologising because I don't believe it.'
Yesterday, at court, he refused to comment any further on the question of an apology.
STRAND NEWS SERVICE