Tommy Graham, MP for Renfrewshire West, was named along with the party's former deputy chief whip, Don Dixon, in a note left by the Paisley South MP Gordon McMaster when he killed himself last month.
An internal party inquiry into the death is believed to have concluded that Mr Graham had spread rumours about Mr McMaster despite his denial of the claim. It is likely that he could have the party whip suspended, with an announcement possibly as early as today.
Labour officials were suggesting last night that they wanted to see the affair cleared up before the launch of Labour's "yes" campaign on Scottish devolution tomorrow.
Party sources in Scotland have claimed that Mr Graham should have been disciplined two years ago when they investigated claims of vote-rigging in his constituency, but that the whips' office at the time had failed to act.
The latest inquiry was carried out by the current Chief Whip, Nick Brown, who received a number of affidavits from party members who swore that Mr Graham had taken part in a campaign against Mr McMaster, who was suffering from fatigue caused by myalgic encephalitis (ME). Rumours had circulated that he was gay and might have Aids. Mr Graham has said publicly since his colleague's death that he had a serious drink problem.
The suicide has also caused old allegations to resurface about politics in Paisley. Mr McMaster believed that one reason for his unpopularity was that he had campaigned against drugs gangs in the area along with the Paisley North MP Irene Adams. Mrs Adams had alleged that a company set up with public money had been used to launder drug money.
Last night the Tories' Scottish affairs spokesman, Dr Liam Fox, wrote an open letter to Tony Blair demanding that he return from his holiday in Europe to sort out the affair. In his letter, he wrote: "Labour's disarray in the west of Scotland has been allowed to continue unabated for far too long."
Referring to similar problems in other areas of Scotland, Dr Fox added: "We were told that the situation in Monklands, Glasgow and Govan were all special circumstances. That is no longer a credible excuse."
Meanwhile, Donald Dewar, the Secretary of State for Scotland, admitted in a radio interview that he was worried about the possible impact of the Paisley crisis on the devolution vote. "Clearly there is a problem. Clearly I am concerned and worried, because I read the newspapers like everyone else," he said. But he hoped Scots would recognise the devolution debate was about a "great matter of principle" - of how Scotland should be governed.Reuse content