A culture of bullying is endemic at the top of the organisation representing rank-and-file police officers in England and Wales, MPs have said.
In a damning report, the Home Affairs Committee said the Police Federation urgently needed reform.
It accused the organisation of pointlessly sitting on millions of pounds that should be given immediately back to thousands of officers.
The report calls for full disclosure of its financial affairs.
At its annual conference next week, the Police Federation is expected to debate far-reaching reforms and elect a new leader after an independent report called for top-to-toe changes at the crisis-ridden and secretive organisation.
That report, by the former top civil servant at the Home Office, Sir David Normington, found ordinary officers had lost confidence in the federation amid the complete failure of its strategy to oppose government cuts to policing.
During their follow-up inquiry, the MPs said they had heard "alarming" allegations of bullying and unprofessional conduct.
They said in their report that the federation's former chairman, Paul McKeever, who died in office, was the victim of a systematic campaign of abuse, as was his successor, Steve Williams.
The committee published documents provided by former federation officials which allege that they had been victims of "sustained abuse" and bullying by the general secretary, Ian Rennie, and an adviser.
Other evidence published by the committee includes an email drafted by Mr Williams, in which he wrote: "We all saw what happened to our friend and colleague Paul McKeever and with a young family I do not intend to let the same thing happen to me."
Both Mr Williams and Mr Rennie are resigning at next week's conference.
In a statement, Mr Rennie said: "The evidence [alleging bullying] is disputed... and was disputed when the incident referred to occurred over 10 years ago.
"It was settled by informal agreement at the time."
He said he had not faced any formal complaints throughout his six years in post.
Policing minister Damian Green said the revelations about the Police Federation were contributing to a wider public loss of faith in the police at large.
He said that the federation had been seen to be "dysfunctional and secretive" and this had damaged public confidence.
MP Keith Vaz, chairman of the Home Affairs Committee, said events at the federation rivalled any soap opera.
"When you hear stories that the national leadership has been indulging in rival acts of bullying, that is simply not acceptable," he said.
"We need to change that culture if we're going to restore the reputation of what is the finest police service in the world."
'£120 per officer'
The MPs criticised the federation for holding reserves of £70m which it probably did not need to properly carry out its functions.
They said that a halving of reserves could lead to an immediate rebate of £120 for each member.
They echoed Sir David Normington's calls for federation branches to disclose what could be further vast sums held in secondary bank accounts.
Responding to the report, Mr Williams said: "We welcome the Home Affairs Committee's reiteration of the principles contained within that report and of its modernising agenda, which we will be working to implement at our annual conference next week."
The outcome of the conference is critical to the future of the organisation, which runs the risk of Home Secretary Theresa May directly intervening to impose reforms.
A Home Office spokesman said that police deserved a representative body that was transparent and accountable.
"If the federation is to have public legitimacy, the Normington recommendations must be implemented swiftly and in full," he said.
However, the chairman of the Derbyshire Police Federation, Mark Pickard, told the BBC Radio 4's Today programme that although he wanted to see the recommendations implemented, he had reservations that they would actually be brought in.
"It's a bit like turkeys voting for Christmas," he said.
Shadow policing minister Jack Dromey said: "Change is necessary and it is in everyone's interests for a more open organisation.
"Certainly any culture of bullying must be called out and eradicated. No police officer I know would consider that acceptable."
The federation, which has about 127,000 members, represents all officers up to and including the rank of chief inspector.