The outgoing Labour MP for Falkirk, Eric Joyce, has blamed members of the Unite union for the bitter dispute over alleged-ballot rigging in the constituency that has seen Labour refer the matter to the police.
Mr Joyce, whose departure from the party after self-confessed "atrocious" behaviour in a bar brawl last year sparked the selection, said the outcome of the dispute "will determine whether Labour can win the 2015 general election".
In an article for The Guardian, he attacked the "amateur, hubristic and irresponsible actions of a small number of Unite officials at the top of the organisation" and said party rules would require further reform.
The referral of the case to the police had "raised the stakes to the highest level".
In the past unions had been a "stabilising influence" on the party in the town, he suggested, using their "putative power" sensibly in recruitment and selection.
But this time there appeared to be a deliberate effort to "swamp" the party with new members - and "hysterical" libel threats when the MP wrote about them online, he claimed.
Labour Party officials said they had contacted the Procurator Fiscal's Office in Scotland over claims Unite sought to pack the constituency party in Falkirk with its members to secure the selection of its favoured candidate for the safe Labour seat.
The move was angrily denounced by Unite general secretary Len McCluskey who dismissed the allegations as "nonsense" and accused the Labour leader of deliberately seeking a "punch-up" with the unions.
A defiant Mr Miliband hit back, accusing Mr McCluskey of defending "malpractice" and demanding he "face up to his responsibilities" as he sought to counter Tory efforts to exploit the controversy.
"Without Ed Miliband's decisive actions in commissioning the report, Unite would have pushed legitimate Labour members out of the way to install what would have been a Unite-first, Labour-second candidate and, quite likely, MP." Labour sources said the two men had not spoken directly since the beginning of June - highlighting the depth of the breakdown in relations.
In a further signal of his intent, Labour sources made clear Mr Miliband would speak out in the coming weeks about the "wider questions" it had raised about the historic close relationship between the party and the unions.
Some within the party would like to see the formal link with the trade union movement - which was behind Labour's founding in 1900 - broken, although Mr Miliband is not thought to have made any decision on taking such a bold step.
Shadow business secretary Chuka Umunna said however that he was "not aware of any review going on into Labour's relationship with the trade unions" and suggested it was not necessary.
"We engage with a broad spectrum of stakeholders... to come up with policy and we seek to govern in the interests of the British people," he told BBC2 's Newsnight.
"I don't believe it is a huge issue."
The decision to refer the matter to the police was said to have been taken after consulting the party's solicitor following the conclusion on Thursday of a review of its membership procedures by general secretary Iain MacNicol.
Labour sources said the review had unearthed further evidence in addition to the material which had been gathered during an internal inquiry which led to the Falkirk constituency party being placed in "special measures" on June 25. All the evidence collected will now be passed to the police.
They declined to detail the specific reasons for involving the police but indicated that members recruited via a - now axed - scheme allowing unions to pay fees for a short initial period "must be signed up legitimately, knowingly and willingly. And not with any conditions attached".
A party spokesman said they were awaiting guidance from the Procurator Fiscal over how to proceed with handing over their evidence.
Unite's preferred candidate in Falkirk, Karie Murphy, has already been suspended along with the constituency party chairman Stephen Deans.
Ms Murphy worked in the office of MP Tom Watson, the former union official who quit as the party's election co-ordinator in what he said was a bid to aid party unity, hitting out at anonymous briefings against him by shadow cabinet colleagues.
Mr Watson's departure from the shadow cabinet means he has also lost his place on the party's National Executive Committee (NEC), the party sources said.
Mr McCluskey said Unite would co-operate with the police inquiry but warned that it would not bring the matter to an end.
He said the party leadership's handling of the crisis had been "nothing short of disgraceful" and insisted that only an independent inquiry could get to the truth of what had happened in the constituency.
A clearly emotional Mr McCluskey accused Mr Miliband of deliberately picking a fight in an echo of Tony Blair's "Clause IV moment" when he got rid of Labour's historic commitment to collective ownership.
Asked if Mr McCluskey should consider his position if the allegations against his union were proved, a Labour source said: "Let's see where the police inquiries take us."
The Conservatives sought to press home their attack on Labour, Mr Cameron saying Mr Miliband had lost control of his party.
"It's quite clear the trade unions have far too much control over Labour. This has happened on Ed Miliband's watch. It is something of a scandal that is unfolding and he badly needs to grip it," he said.
Tories said they would be handing over to police a Unite document which they have obtained, listing 41 constituencies in which the union has supported candidates for selection.
They also claimed Labour had been "bounced" into contacting prosecutors after Conservative backbencher Henry Smith wrote to the Chief Constable of Scotland asking him to investigate - a claim Labour strongly denied.
Business Minister Michael Fallon said: "If people have been signed up to vote to choose new MPs without their knowledge, that's criminal activity and the police should be investigating.
"The crime would be they would have been signed up without their knowledge, so they've been impersonated.
"The police should have been investigating all along. He has had these allegations in front of him for weeks; he's done nothing about it."
He told BBC2's Newsnight Unite "clearly were trying to subvert the democratic process" and that selection processes should be suspended in all 40 constituencies.