Nicola Sturgeon has seized on comments made by a Labour MP which revealed "the party's priorities in Scotland".
The First Minister claimed remarks made during a BBC interview today by Siobhain McDonagh were "politically devastating".
The veteran Labour MP had raised the recent suspension of two of her party's councillors in Edinburgh after they abstained on a vote to form a minority administration in the capital.
McDonagh claimed the duo "weren't prepared to vote for the Tories over the SNP".
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Katrina Faccenda and Ross McKenzie were suspended by their local party last month after they complained about council posts being handed to the Lib Dems and Conservatives in return for Labour being able to take power as a minority administration.
Labour took charge in Edinburgh following May's local election despite having just 13 of the city’s 63 councillors - ousting the SNP in the process.
McDonagh used the suspension as an example of how her party would not work with the SNP at Westminster after the next general election.
She said: "In Scotland, Labour has gone so far as to rule out any relationship with them even in local elections.
"I mean, I think, we lost control of Aberdeen council because we refused to do it. Only last week we suspended two Labour councillors in Edinburgh because they weren't prepared to vote for the Tories over the SNP.
"So you've got actual, real live examples of Labour's determination to do nothing with the SNP."
The clip was seized on by pro-independence social media accounts and later shared by the First Minister.
She said: "Refreshingly frank (and politically devastating) from a Labour MP about her party’s priorities in Scotland".
But a Scottish Labour source told the Record: "The situation in Edinburgh is not as it has been presented by Siobhan McDonagh, who does not have knowledge of the circumstances, nor has been presented by Nicola Sturgeon, who is scoring petty partisan points.
"Disciplinary matters for Edinburgh councillors are the concern of the Edinburgh Labour group."
Speaking last month, Edinburgh Labour group leader Cammy Day said: "It's disappointing the two members chose to break the group whip which is how we're all elected and abide by democratic decisions.
"The internal process has been finalised and the group's decision is to suspend them for eight weeks with immediate effect."
It comes as Scottish Labour leader Anas Sarwar was earlier accused of trying to "sabotage" his party’s only council pact with the SNP.
The Record revealed how Labour and the Nationalists agreed in May to run Dumfries and Galloway together, but Sarwar has downplayed the agreement as “interim”.
This is in spite of Labour ’s co-leader on the local authority saying there is no time limit for the deal.
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