The leader of Labour's biggest union donor has said he has "no trust" in the party's handling of a growing row over candidate selection in Falkirk.
Len McCluskey denied Unite tried to influence the choice by packing the local party with its members, saying an internal inquiry was a "disgrace".
His comments came after MP Tom Watson quit as Labour's election co-ordinator.
Labour dismissed Mr McCluskey's call for an independent inquiry, saying it was a matter for the party.
Mr Watson's office manager Karie Murphy was the union's preferred candidate in Falkirk.
In Mr Watson's resignation letter to Labour leader Ed Miliband, the West Bromwich East MP wrote it was better for the "future unity" of the party that he stood down.
'A stitch-up'In a letter to Labour's general secretary, Unite general secretary Mr McCluskey said the union had "nothing whatsoever to do" with the alleged attempt to sign 100 or more members to the constituency party and paying their subscriptions.
"The report has been used to smear Unite and its members," he said. "It is noteworthy that members of the shadow cabinet have been in the lead in initiating this attack."
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Angela Eagle MP: "Being proud of our trade union links doesn't mean that we can tolerate what went on in Falkirk"
He demanded an independent inquiry into the events in Falkirk be held.
Mr McCluskey said Labour's internal investigation was "simply a stitch-up" designed to "produce some evidence, however threadbare, to justify pre-determined decisions".
"The mishandling of this investigation has been a disgrace," he said.
"I, however, am obliged to uphold the integrity of Unite, and I can no longer do so on the basis of going along with the activities of a Labour party administration in which I can place no trust."
The BBC's political editor Nick Robinson said the row was the "most serious crisis" Mr Miliband has faced since becoming Labour leader.
It represents a wider battle over the future complexion and direction of the Labour Party and Mr Miliband was now trying to turn the row into something defining and positive, said our political editor.
'Abuse of selections'Labour has suspended Ms Murphy and Falkirk party chairman Stephen Deans and taken direct control of selecting a candidate to contest the Westminster seat at the next general election, in 2015.
In a statement, Labour said that there were allegations that Ms Murphy and Mr Deans may have been involved in a breach of Labour Party regulations relating to "potential abuse of membership rules".
It also closed down the scheme under which unions could sign up members to the Labour Party and pay the fees on their behalf.
Mr Miliband said: "I am not going to have abuse of membership procedures and parliamentary selections in my party, and that is very clear, and I want to be clear about that to the leadership of Unite the Union in particular."
End QuoteThe Labour leader wanted Watson's ruthlessness, organisational skill and campaigning zeal to help him reach Number 10. Today, though, Miliband has had to accept Watson's resignation"
Angela Eagle, the shadow leader of the House of Commons, said Mr McCluskey was entitled to his opinion, but it was up to the party to "uphold the integrity of parliamentary selections".
She told BBC Radio 4's Today programme: "It's up to the leader of the Labour Party, not anyone else, to decide to take the action that we've taken to ensure that our rules are followed.
"People can have an opinion about what action to take, but the leader and the general secretary of our party have made these decisions. The NEC (Labour's executive body) will be looking at this too. Outside of that, it's nobody's duty but ours to deal with this issue.
"We will not tolerate the kind of behaviour we have seen in Falkirk, whoever is responsible."
Conservative Party chairman Grant Shapps said Mr Watson's resignation was a "clear vote of no confidence in Ed Miliband's weak leadership from the man he brought in to run his campaign. But this still doesn't change the fact that Len McCluskey's Unite union is taking over the Labour Party".
The Falkirk vacancy emerged when MP Eric Joyce was kicked out of the party after committing an assault in a House of Commons bar.
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