General Secretary Colin Smyth will leave his post next month following internal tensions over Scottish leader Johann Lamont’s bid to rebuild the party following its disastrous election defeat to the SNP last year.
The Scottish party has adopted new structures, loosening ties with the UK party and putting all Scottish MPs and MSPs under Ms Lamont’s leadership for the first time.
Mr Smyth, who is also a councillor in Dumfries, has served as general secretary since 2008, when he was appointed by then-leader Wendy Alexander.He broke the news to staff at Labour’s John Smith House HQ in Glasgow today.
Insiders say Ms Lamont has been looking to refresh her top team since she was elected in December.
Scottish Labour’s head of communications and strategy, Rami Okasha, who was close to Mr Smyth, has been suspended and faces a disciplinary investigation.
Mr Smyth’s resignation comes as Ms Lamont is planning to create a new office in Edinburgh where policy and political strategy will be set.
Key personnel brought in by the new leader - including senior adviser Paul Sinclair and press officer Craig Davidson - are expected to be based there.
John Smith House will concentrate on administrative and membership business, it is understood.
Scottish Labour hope to replace Mr Smyth by Christmas.
In the meantime, the office will be run by Brian Roy - son of Motherwell MP Frank Roy - assisted by Glasgow Provan MSP Paul Martin, a key ally of Lamont’s.
Potential candidates to become the next general secretary include Colin Edgar, Glasgow City Council’s director of communications.
Mr Edgar is a former Labour press officer but friends are unsure whether he would relish a return to frontline politics while his children are young.
James Adams, a Glasgow Labour councillor who also used to work for the party, has also been tipped as a possible successor.
The developments did not surprise Labour insiders.One said: “Colin’s coat has been on a shoogly peg since the start of the year. His departure has been talked of as a possibility or even a likelihood. It’s a shame, it was not his fault Labour lost the election.”
It is understood that Scottish Labour MPs - who have always looked to John Smith House for support - were slower to embrace Ms Lamont’s modernisation plans.
However, MPs and MSPs have begun to form a stronger working relationship, insiders say, thanks in part to the efforts of deputy Scottish leader Anas Sarwar, the MP for Glasgow Central to forge links between the two groups.
Ms Lamont’s supporters said she was determined to “assert her authority” in restructuring the party.
But the SNP said: "Mr Smyth's sudden departure comes following a weekend of reports about Labour factionalism and in-fighting in Scotland, and the suspension of a senior party official.
"It is ironic that Labour - which is following a Tory-led campaign trying to convince us that we are better with a Tory-led government in London taking decisons for Scotland - cannot even get its Scottish and Westminster groups to work together.
"But much of the focus is still on Johann Lamont. After a year in charge, Labour have fallen even further behind the SNP than in their disastrous election showing of 2011. If Ms Lamont cannot even lead her own party properly, she can never seriously aspire to lead the country."
In the official statements today, Labour said Mr Smyth had “decided now is the time to take on new challenges”. He will step down at the party's UK conference in Manchester in October.
He said: "Working with the members and the staff of the Scottish Labour Party is a real privilege. However, after successfully being re-elected as a councillor in May, I decided to inform Johann that I wanted to take on new challenges that would give me more time to focus on that role.
"Having just got married and moved to a new home in Dumfries, I was keen to make that move now, before the demands of the rollercoaster of election campaigns starts again.
"There have been many highs in my time with the party, including helping deliver by-election and General Election victories and the recent local elections has shown that Scottish Labour is beginning the fight back after the disappointment of the last Scottish Parliamentary elections.
"I fully support Johann in the task of rebuilding the Scottish Labour Party and will serve that cause in any way I am asked to. I wish her and all my colleagues well. This may be the end of my time as General Secretary but it is not the end of my commitment to the Scottish Labour Party."
Ms Lamont said: "Colin Smyth has been and remains a dedicated servant of the Scottish Labour Party. I, on behalf of all the party, thank him for all he has done. I understand his reasons for deciding to move on but we will miss him in John Smith House.
"He has served the party well and I am delighted that he will continue to serve the party as a councillor in Dumfries and, I am sure, in any other role the party calls upon him to fulfil in the future."
Iain McNicol, General Secretary of the UK Labour Party added: "Colin has been a dedicated, loyal and hard-working servant of our party over the past 10 years. He has given me great support in my first year as General Secretary and delivered a fantastic fight back in the Scottish local election this year.
"I look forward to working with Colin again in the coming years as he continues his political career. Everyone in the Labour Party wishes Colin the best for the future."