Labour in Glasgow: the long goodbye

The move is the latest blow to city leader Gordon Matheson, who narrowly survived a crucial budget vote on Thursday after six Labour councillors rebelled against his administration. The vote, which led to claims of bullying by Labour to contain the rebellion, has left Matheson badly damaged in the run-up to the poll, when Labour faces a serious SNP challenge.

The formation of a new party designed to appeal to disaffected Labour voters could prove the final straw for Matheson, splitting Labour's core vote and allowing the Nationalists to take power.

The new party is being set up by Tommy Morrison, who resigned as a Labour councillor last week in disgust at his treatment by the party hierarchy. He has applied to register the new party at his home address and is one of its office bearers. The intention is to stand at least one candidate in each of the 21 city wards, drawing on political novices and Labour rebels. Those close to the project admit it would do well to return three or four councillors, but that could be enough to hold the balance of power in a chamber finely balanced between SNP and Labour.

Even a strong showing at the polls might be enough to dash Labour's hopes of holding the council.

Morrison told the Sunday Herald: "I'd like to see this new party give the citizens of Glasgow a wider choice in this election. I believe it will contest 21 wards in the city. I think there will be 23 candidates, many standing on the banner of re-election [ie, existing councillors].

"We are campaigning against £24 million in cuts. That's what Glasgow Labour wants to tackle.

"We'll be called all sorts of things by Labour. They will try everything under the sun to stop us. But our party will be made in Glasgow, by the people of Glasgow, for the people of Glasgow."

However, Morrison said the electoral watchdog had not yet agreed to register the new party: "We have to wait for approval by the Electoral Commission, which has one or two issues with the application. Their difficulty is with the word 'Labour'. The commission's view is that anyone else using that word could confuse the voter. I think voters are far cleverer than that."

The new party could also face PR problems as some potential rebel candidates have recently made the headlines for the wrong reasons. Councillor Shaukat Butt has been charged with allegedly assaulting his wife and Councillor Willie O'Rourke was suspended by Labour for alleged inappropriate remarks about a nine-year-old rape victim.

Labour would also be sure to cast the new party members as malcontents and bad losers who are unable to accept their time in politics is over.

Most of the rebels are among 17 so-called "dead wood" councillors deselected last year by Labour to make way for new talent. This led to a destructive backlash, with accusations of bullying, stitch-ups and London Labour directing a purge of Glasgow Labour. There was also incredulity that some councillors survived Labour's vetting, particularly Alistair Watson, who resigned as chairman of Strathclyde Partnership for Transport in 2010 during an expenses scandal. "I only wish I was as perfect as Alistair Watson. He limboed under the bar," said Morrison. But most of the anger was directed at Matheson and his whip, Alex Glass, who was deselected by local activists sympathetic to the old guard.

It was this bad feeling towards Matheson, and the creation of a large group of Labour councillors with nothing to lose by rebelling, which formed the backdrop to Thursday's chaotic budget vote.

Strange alliances started forming in the new year. Last month, two Glasgow SNP MSPs, James Dornan and Humza Yousaf, met one of the key Labour rebels for a coffee in the Tinderbox cafe around the corner from the City Chambers. With its low ceilings and dark corners, the place is a favourite haunt of council plotters.

Dornan, who is also a Glasgow councillor, was primarily fishing for Labour scandal to use as ammunition in May's election campaign, but he also asked if there was anything he could do for the rebel and his disaffected allies, a sign that the SNP were trying to reach out to Labour members on a broader footing.

Shortly afterwards rebel Andy Muir talked to SNP whip Graeme Hendry about the budget. Muir explained that there was no point having separate party budgets, as these would divide rather than unite the opposition to Labour's own plan. The best option would be a united budget which could command cross-party support. This led to the joint opposition budget sprung on Labour half-way through Thursday's council meeting, putting the administration's survival on the line.

The SNP also had other surprises in store. A week before the budget, they timed the defection of Labour Councillor Irfan Rabbani to coincide with a visit to Glasgow by Labour leader Ed Miliband. Then, on the eve of budget, Muir resigned, as did former loyalist Anne Marie Millar.

On the morning of the vote, five more Labour councillors resigned from the party with immediate effect: Ruth Black, Shaukat Butt, Stephen Dornan. Tommy Morrison and Willie O'Rourke.

The key moment came about 90 minutes into the debate when the opposition groups, after some pantomime in which they presented four separate budgets, suddenly pulled out a joint alternative document and asked for a snap vote.

Ironically, it was quick thinking by Matheson's chief rival inside Labour that saved the leader. City treasurer Paul Rooney, who stood against Matheson for the leadership in May 2010, asked for an adjournment to consider the paperwork, buying Labour precious time. Labour secured an hour's breathing space on a vote of 38 to 36, suggesting the key vote on the budget would be equally close.

The next 60 minutes saw pandemonium in the marble staircases flanking the Council Chamber as rebels, reporters and loyalists tried to calculate the numbers lining up on each side. But away from the cameras, the vote was settled by the dark arts of the Labour whips.

Butt, who was already under huge pressure from former Govan Labour MP Mohammad Sarwar not to give his vote to the opposition, was spotted circled by Labour heavies with a phone held to his ear. Despite signing away the Labour whip that morning, Butt backed Matheson's budget, although he later tried to deny this until told there was a list available showing how everyone had voted.

Another would-be rebel, John Flanagan, although deselected by Labour, was told that if he stood as an independent in May and won he could return to the Labour fold, much as Ken Livingstone did after becoming London's mayor.

Other approaches were less successful. Rebel Anne Marie Millar was reduced to tears by Labour's Gilbert Davidson, after she inferred from their chat that her disabled son might lose his job on a council quango if she didn't buckle. She voted for the opposition regardless.

Matheson's closing speech, in which he bizarrely admitted there was "pain and

hurt and division" in Labour, was a masterclass in how not to win votes. Nevertheless, the final tally was 40 to Labour, 38 to the opposition. Matheson's majority was cut from 15 to two, and one of those was the independent Colin Deans.

Afterwards, the SNP appeared pleased, but also relieved not to have been left bound to a set of spending proposals not entirely their own.

One Nationalist admitted it was probably easier to go into the local election on a campaign of "Kick Labour out" than keep the SNP in.

Labour is also looking ahead to the elections. Despite the tension on Thursday, Matheson still won when it mattered, Labour argues, strengthening his position.

As to the rebels, whether they stand under a common banner or as independents, "they will walk a short plank into the sea", predicts one senior Labour figure. "We will go in strong on how the SNP group take their orders from Edinburgh. All they care about is the constitution, not Glasgow. There will be a couple of big ticket policy announcements – focusing on young people who need a hand up on jobs and housing."

The battle of George Square is just warming up.