The party was formed in 1893 making it one of the earliest democratic socialist political parties operating in the United Kingdom. Its founder chairman was James Keir Hardie who had been elected an independent labour MP for West Ham South in the previous years General Election.
The early years of the ILP were characterised by a number of amalgamations with small socialist and leftist groups, and in the 1895 General Election they contested 28 seats. The party polled well in some urban centres but Hardie lost his seat.
The ILP played a central role in the formation of the Labour Representation Committee in 1900 and when the Labour Party was formed in 1906 the ILP affiliated to it. This affiliation allowed the ILP to continue to hold its own conferences and devise its own policies which ILP members were expected to argue for within the Labour Party. Also, as the Labour Party did not operate individual membership until 1918 the ILP provided much of Labour's activist base in the early years.
The relationship between the ILP and the Labour Party was characterised by conflict. Many ILP members viewed the Labour Party as being too timid and moderate in their attempts at social reform, and consequently many ILP branches chose to affiliate to the British Socialist Party, who in 1920 would play a leading role in the formation of the Communist Party of Great Britain. This difference of opinion between the ILP and the Labour Party is exemplified by their divergent approaches to the UK's involvement in World War I, which the Labour Party officially supported, whilst the ILP opposed it.
In 1920, the ILP rejected (but only after the intervention of Ramsay MacDonald) a proposal to affiliate to the Third International. None the less, many communists did join the ILP in an attempt to take over the party.
At the 1922 general election several ILP members became MPs (including future ILP leader Jimmy Maxton) and the party grew in stature. The ILP provided many of the new Labour MPs, including John Wheatley, Emanuel Shinwell, Tom Johnston and David Kirkwood. However, the first Labour government (returned to office in 1924) proved to be hugely disappointing to the ILP. Their response was to devise their own programme for government but the Labour Party leadership rejected this.
For the duration of the second Labour government (1929-31) 37 Labour MPs were sponsored by the ILP and they provided the left opposition to the Labour leadership. The 1930 ILP conference decided that where their policies diverged from the Labour Party their MPs should break the whip to support the ILP policy.
It was becoming clearer that the ILP was diverging further away from the Labour Party and at the 1931 ILP Scottish Conference the issue of whether the party should still affiliate to Labour was discussed. It was decided to continue to do so, but only after Maxton himself intervened in the debate to speak up to continue to do so.
At the 1931 general election ILP candidates refused to accept the standing orders of the parliamentary Labour Party, resulting in them standing without official Labour Party support. Five ILP members were returned to Westminster and created an ILP group outwith the Labour Party. In 1932 the ILP held a special conference and voted to disaffiliate from Labour. Their association with one another was over.
The Labour left-winger Aneurin Bevan described this decision as the ILP deciding to remain "pure, but impotent", which proved in the long-run to be true as outwith the mainstream Labour Party their political influence was negligiable.
In the 1930s the party suffered a decline in membership (probably owing to the decision to disaffiliate from Labour) but they remained active. They were particularly active in supporting the Republican side in the Spanish Civil War, and many members (including George Orwell) actually went to Spain to assist them.
The ILP continued to contest Parliamentary elections with mixed results, but they ceased to be as prominent after the death of Maxton in 1946 (they managed to hold onto Maxton's Glasgow seat in a close by-election though). Maxton's death severely damaged the ILP, although they continued activity in the 1950s and 1960s, campaigning on issues such as de-colonisation and opposition to nuclear arms. The party managed to gain many defectors from the Communist Party in the 1950s when they were losing support.
In the 1970s the ILP reassessed its views on the Labour Party, and in 1975 they renamed themselves Independent Labour Publications and became a leftist pressure group inside the mainstream Labour Party.