In a move which provoked Conservative claims that Labour was following a cynical news management strategy, the unit has vowed to "anticipate [and] neutralise" bad news and "wherever possible turn a negative attack into a positive storyline".
Labour councillors across the country have been told to contact the unit at any hour of the day or night if compromising information, true or false, reaches the press.
In a briefing paper, candidates faced with embarrassing revelations about their local Labour Party are told to "avoid, where possible, promising an inquiry" as this will keep details of a scandal running in the press.
"High expenses claims by councillors, a foreign trip by councillors or officers, a controversial grant or appointment and obsessive political correctness" are identified as weaknesses which might be exploited by the Conservatives and Liberal Democrats.
News of a potential scandal should be dealt with in two ways, the unit says. If the allegation is "a lie or a gross distortion" the attackers should be "discredited for resorting to lies"; if the accusation against Labour is true, candidates should condemn what has happened and promise to "take immediate action to sort it out".
Labour's hard line was inspired by the success of Bill Clinton's policy of responding quickly to any accusation made against him in the 1992 US presidential election campaign.
Labour has also gone on the offensive; its tough tactics were in evidence in a party political broadcast last week which outraged Tories by repeatedly calling John Major a liar.
Conservative Central Office too has been using negative publicity. It has accused Labour councils of unwarranted political correctness and excessive bureaucracy. In Bristol, Conservatives claim, Avon council gave £2,320 to the Lesbian/Bisexual Women's group and withdrew its annual £6,000 for the Scout Association.
Nottingham council, the Tories claim, built a separate entrance at a community centre for the use of Muslim women at the cost of £100,000 while in Liverpool the council allegedly "lost" £20m due to book-keeping mistakes.
Labour claims the accusations are untrue, distorted or recycled. Howard Knight, a member of the Rapid Response and Rebuttal Unit, said the party expected the Conservatives would try to discredit it in the election run- up.
But Conservative MPs said the formation of the rebuttal unit showed Labour was wary of close scrutiny of its councils.
Gary Streeter, MP for Plymouth Sutton, said: "It shows that they are scared about what they really stand for and how their councils behave. It shows that they want to keep the public at arm's length. They want the party to hide behind the gooey image of Tony Blair. It's all part of the Labour gloss."Reuse content