Last week's Sunday Times said gang leaders in Liverpool, Greater Manchester, Paisley and North Shields have ordered supporters to join constituency branches to ensure the election of sympathisers to influential council positions.
It claimed police and Customs and Excise had evidence that criminals were using political muscle to win security contracts with councils, often to ensure the distribution of drugs in clubs and bars.
Labour has rejected claims that a leading amphetamine supplier in Salford has infiltrated the party. 'This is a Tory smear; there is no evidence,' said John Merry, Salford education chair.
During the 1992 general election Mr Merry and other party workers were threatened outside Ashfield Labour club, which was later destroyed by arsonists.
The party cites this as evidence of the strong stand its members are taking against organised crime in the area, often at risk to themselves.
Last week Irene Adams, Labour MP for Paisley North in Glasgow, laid seven questions in Parliament for answer by Scottish secretary Ian Lang about FCB Enterprise Security Ltd, which is funded by both the Scottish Office and councils. Individuals involved in the company have figured in an investigation by Strathclyde police.
In North Tyneside MBC, Labour leader Brian Flood has called in Northumbrian police after he investigated the award of £800,000 of contracts to a security company set up by a convicted killer.