Tom Watson quits as Labour election campaign chief
Labour's Tom Watson has resigned from his shadow cabinet role as the party's general election co-ordinator.
The MP has been embroiled in a row about the role of the Unite union in candidate selection in Falkirk.
Mr Watson, whose office manager was the union's choice for the seat, wrote that it was better for the "future unity" of Labour that he resigned.
Unite said the party's inquiry into the Falkirk selection had been a "stitch-up" and a "disgrace".
But Labour leader Ed Miliband told the BBC he was "incredibly angry" that the "good name of Labour Party members, of trade union members and of the Labour Party has been besmirched by the behaviour of a few individuals".
Unite - one of Labour's biggest backers - has been accused of hijacking the process to select a candidate in Falkirk to replace outgoing MP Eric Joyce.'Mess'
Mr Watson's office manager, Karie Murphy, was the union's preferred candidate.
The MP, a former flat-mate of Unite's general secretary, offered to go on Tuesday but was asked to reconsider by Mr Miliband.
A growing number of senior Labour figures believed that Watson was using his influence over the selection of Labour parliamentary candidates to re-make the party in his own image - more working class and less Blairite.”
After Mr Watson resigned on Thursday, Labour spokesman confirmed it had suspended Falkirk party chairman Stephen Deans and Ms Murphy.
It also closed down the scheme under which unions could sign up members to the Labour Party and pay the fees on their behalf.
Mr Miliband said: "I am not going to have abuse of membership procedures and parliamentary selections in my party, and that is very clear, and I want to be clear about that to the leadership of Unite the Union in particular."
But Unite's general secretary Len McCluskey denounced the party's own investigation as "simply a stitch-up" designed to "produce some evidence, however threadbare, to justify pre-determined decisions".
He added: "Even on the basis of this flimsy report, it is clear that these decisions cannot be justified."
Mr McCluskey accused Labour of trying to "smear" Unite and its members, adding: "The mishandling of this investigation has been a disgrace."
He called for an independent investigation into events in Falkirk.
In his resignation letter, Mr Watson said he was not quitting because of "unattributed shadow cabinet briefings around the mess in Falkirk... though they don't help".'Loyal servant'
He said: "I fully accept the consequences of that decision and genuinely hope my departure allows the party to move on."
In response, Mr Miliband praised Mr Watson's efforts to "regalvanise the grass roots" and said he had "helped to put real spirit into Labour Party activists up and down the country".
But he said: "As I said to you when we spoke at lunchtime today, I do believe that it does now make sense for you and for the party for you to step down."
Conservative Party chairman Grant Shapps said "This is a clear vote of no confidence in Ed Miliband's weak leadership from the man he brought in to run his campaign. But this still doesn't change the fact that Len McCluskey's Unite union is taking over the Labour Party."
Labour officials have now taken charge of the selection process in Falkirk for the 2015 general election, following claims that Unite had encouraged its members to join the party in order to lend their support to the union's preferred candidate.
Now only those who were party members by March 2012 can take part in the vote.