A dozen sitting councillors in Corby, Northamptonshire, including its leader and deputy leader, who have been de- selected by Labour, were joined by 11 other candidates to launch Corby First Labour - a new political party which will fight Labour for 23 of the council's 27 seats in May's local elections. Their announcement came as Roy Maddox, the Labour Party regional secretary, said he was sending a dossier to the district auditor, alleging serious impropriety by the council leader and others.
The row has awkward implications for Labour, as Mick Skelton, a former steel union official, who is acting as agent for the new party for the local elections, promised it would fight the general election too.
Corby is the Conservatives' ninth most marginal, seat with a majority of just 342. A split vote could cost Labour the seat and would be the culmination of several years of infighting.
This led to a recommendation by the local party that Kelvin Glendenning, the leader, Peter McGowan, his deputy, and Ray Telfer, the mayor, should be expelled for breaking party rules. Labour's national constitutional committee has been investigating the council since 1993.
The district auditor yesterday confirmed that a review of councillors' expenses and the procedures for approving them was under way, after the issue had been raised by the auditor in the past in management letters.
Launching his new party, Mr Glendenning, 69, the Labour group leader since 1974 and council leader since 1979, accused Labour officials and opponents of a "conspiracy and a vendetta" and of "jealousy" at the success of a town that had "come back from the dead". Corby's steel works closed in 1980 with the loss of well over 10,000 direct and indirect jobs. Since then 15,000 have been created and unemployment stands at only 7 per cent.
Questions, however, have been raised over the propriety of Mr Glendenning moving from a council house to a council-owned Grade II listed cottage, which he subsequently bought at a discount under the right-to-buy scheme after £10,000 was spent on renovations. Mr Glendenning yesterday denied that that much had been spent, and maintained he had been top of the council's priority list for a move after his former council house had been broken into five times. How much he paid for it was a personal matter, he said.
Jack Adamson, 71, 16 years a Labour councillor and one of the nine remaining "official" Labour councillors, said lavish sums had been spent on entertaining and a "breakfast club" in the mayor's parlour had been halted after being brought to the attention of the local auditor. "These people have been in power so long that they consider they have a God-given right to be in control of Corby's affairs," he said. Mr Glendinning denied any impropriety and accused his opponents of "trivia", claiming 25 per cent of local Labour Party members had already resigned with him to fight Labour.
The Conservatives are contesting only 11 of the 27 seats in May's elections, making the dispute unlikely to let them in.