Ten Wrexham Labour councillors quit group and party
Ten Wrexham councillors, including council leader Neil Rogers, have quit the Labour group and the Labour Party.
Mr Rogers blamed "interference" in Labour group meetings by unelected local party "liaison officers".
With 23 members, Labour was the biggest group on the council, running the authority with independent councillors.
A Welsh Labour spokesman said: "This is a disappointing decision. Further discussions will take place over the coming days."
Mr Rogers told BBC Wales that staff from Welsh Labour headquarters in Cardiff were not involved in the interference.
He accused the liaison officers of having "their own personal agenda" rather than "what's best for the people of Wrexham".
"When we go out there we have to be united as a party, and I feel over the last few months we have not been," he said.
The other Labour councillors who resigned were Michael Williams, David Griffiths, Bernie McCann, David Bithell, Geoff Lowe, Malcolm Taylor, Barbara Roxburgh, Steve Wilson, and Andy Williams.
They said in a statement: "Today our position in the Labour Group has become untenable. Regrettably, it leaves us with no alternative but to leave the Labour Party. For many of us it is a very sad day.
"However, we cannot continue to be negatively influenced within the Labour Group on issues that affect the lives of the people of Wrexham."
Deputy council leader Mark Pritchard said there would be talks on who would lead the council "in coming weeks".
Mr Pritchard, a Democrat Independent councillor, said: "The resignations couldn't have come at a worse time for the council as it tries to sort out its budget and cope with financial cuts and slimmed-down services."
He offered assurances that the authority would "continue to deliver services as normal" and that the resignations would "not have an impact on those services".
A Welsh government spokeswoman said: "Wrexham Council is facing significant challenges at present and the uncertainty created by this decision is unwelcome.
"While these are matters which the council itself must resolve, good services for the people of Wrexham should always come first and the council should be focused on delivering the best possible services for local residents."
The resignations came a week after Mr Rogers removed Labour councillor Malcolm King as lead member for finance on the authority's executive board, for raising concerns about a child protection team's staff levels and case loads.
Mr Rogers said an independent inquiry had found "little or no evidence" to support the allegations.
On Wednesday, Conservative shadow local government minister Janet Finch-Saunders called the "shambles" another "disaster for Welsh Labour".
She urged Local Government Minister and Wrexham AM Lesley Griffiths to step in "to ease worries and ensure this farce is swiftly put to bed".
Plaid Cymru said in a statement that a "Labour-run council tearing itself apart" was the "last thing people in Wrexham need".
Plaid accused "two rival groups" of Labour councillors of being "equally guilty of closing key services".