Labour is under pressure to publish an internal report that cleared Unite of claims it tried to rig the selection of a party candidate in Falkirk.
It found no rules were broken and two union officials - one the candidate - have been reinstated as members.
The Tories said Unite was "calling the shots" but Labour said it had acted to protect party interests amid the rift between its leadership and the union.
Karie Murphy later withdrew as the general election candidate.
She said she had been "shocked and saddened" by what had happened but would no longer stand for selection for the sake of "reconciliation and unity".
'Reconciliation and unity'Labour had been investigating allegations that Unite tried to sign up members without their knowledge in the constituency to ensure their favoured candidate, Ms Murphy, was selected for the 2015 general election.
The claims sparked the row between Unite and party leader leader Ed Miliband, who later proposed widespread changes to Labour's links with the unions.
On Friday, the party said an internal inquiry had found no evidence to suggest that rules were breached after "key evidence" was withdrawn.
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Eric Joyce MP says inexplicable events are a victory for the leadership of Unite over Labour
The party said that neither Ms Murphy nor Stevie Deans, a fellow Unite member who was chair of the local Labour Party, had been found guilty of any wrongdoing and both had been reinstated.
The internal report - and a previous internal report into concerns over the selection process - have not been published.
The Conservative Party said it appeared to be a "stitch-up" designed to end a bitter row with Unite - Labour's biggest financial backer.
'Stop dithering'Chairman Grant Shapps said: "If Ed Miliband can't even stand up to his union paymasters, how can he stand up for hardworking people?
"Weak Ed Miliband must now stop dithering, come clean and publish Labour's report into the Falkirk selection in full."
The process of selecting a Labour candidate in Falkirk provoked the bitterest row between the party and the trade unions in a generation.
This was no local difficulty. It had national and wide-ranging personal and political implications.
Members of the Unite union were accused of using underhand means to try secure the nomination of their favoured candidate, Karie Murphy.
She was close to the union's general secretary Len McCluskey, and worked for Tom Watson, the party's general election co-ordinator.
He resigned from the shadow cabinet over the leadership's handling of the Falkirk allegations.
In the wake of the row Ed Miliband announced sweeping reforms to his party's links with the unions - changes which are said to have cost Labour £1m in affiliation fees so far.
Tom Watson now says it was rash of Labour to rush in to wide-ranging trade union reforms before the events in Falkirk had been properly investigated.
Karie Murphy is said to feel battered and bruised tonight - the reputations of some of those involved in this episode might yet suffer a similar fate.
But a Labour spokesman said: "At each step Labour's general secretary and NEC [National Executive Committee] have acted quickly to protect the interests of the party.
"Since Labour began its internal process key evidence has been withdrawn and further evidence provided by individuals concerned."
Police were asked to investigate the matter but decided there were "insufficient grounds" to justify further inquiries.
But the case is also the subject of an investigation by the Information Commissioner's Office into claims that data protection rules may have been broken in the Scottish constituency.
Falkirk MP Eric Joyce - who resigned from Labour after being convicted of assault at a Commons bar - said questions remained over the events.
Tom Watson, the Labour MP who stood down from the shadow cabinet after the row about candidate selection in Falkirk, said people would be "raising eyebrows" when they saw Labour had launched a "complete reassessment" of its relations with the unions on the basis of an inaccurate report.
Labour's ruling NEC will draw up a list of potential candidates from which local party members will choose a prospective MP to represent the party in the 2015 election.
The Falkirk row prompted Mr Miliband to call for an overhaul of the process by which union members affiliate to Labour - a move which would have cost the party millions in funding but which he says could revitalise the party and boost membership.
The GMB union announced earlier this week that it would cut affiliation fees to Labour by nearly £1m.
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