At a meeting next Wednesday, the party's national executive committee will consider a report into Hackney's 40-strong Labour group. It will decide whether a so-called 'Manifesto Group' - which could include as many as 20 councillors - operated as a 'party within a party' to secure leadership of the council.
The NEC will also decide whether in March 1995 members of the alleged group sought to have the suspension of housing director Bernard Crofton overturned, in contravention of the national code of conduct for councillors and the party's own rules.
Labour could decide not to discipline any group members, but it has already signalled its desire to stamp on a three-year dispute which has frozen much of the council's business and revived the spectre of 'loony left' councils.
In May, the party forced all but a handful of Labour members to sign what amounted to an oath of allegiance to the national party, under threat of expulsion.
However, the feuding has continued and as LGC went to press Hackney was preparing to debate whether a second independent inquiry into the suspension and reinstatement of Mr Crofton should go ahead.
Chief executive Tony Elliston has yet to report on his inquiry into Mr Crofton, and a number of industrial tribunals - including that of former personnel director Sam Yeboah - are pending.
The police are also considering a report from Ian Macdonald QC alleging Mr Crofton lied in order to get his job back - a claim strenuously denied by Mr Crofton.
-- As LGC went to press it learned that Labour's NEC has decided to postpone its consideration of the report into Hackney a further week until 31 July (see feature pages 14- 15).