A rift has emerged in the Remain camp after the cross-party People's Vote campaign was accused of "taking instructions" from senior Labour figures in breach of its requirements to operate in a non-partisan fashion.
The claim was strongly denied by the People's Vote but sources in the breakaway Change UK party said the way "Labour-orientated people" were now running the campaign had become a "very real problem".
The growing row first surfaced last week after attempts by pro-Remain parties to unite behind a single independent candidate in the forthcoming Peterborough by-election collapsed in disarray when the prospective candidate, Femi Oluwole, pulled out at the last minute.
Change UK complained he had been subjected to "extreme pressure" from Labour figures working for the People's Vote, who were said to have warned him that he could open the door for Nigel Farage's Brexit Party to take the seat - previously held by Labour - in the poll on June 6.
Sources in the party said the incident highlighted serious concern about the way People's Vote - whose founder members included MPs Chuka Umunna and Anna Soubry, who both now sit for Change UK - was now operating.
"There are big questions over its impartiality. We are not the only party that has raised concerns about that in terms of the way that it is supposed to operate. It takes instructions to some extent directly from members of Labour's Shadow Cabinet," one Change UK source said.
"The members of staff of the People's Vote campaign are supposed to be independent, non-partisan and cross-party.
"There is a legal obligation on them to do so, otherwise under electoral law, their spending can be deemed to be part of the Labour Party's spending."
The source questioned why the campaign's website endorsed Labour as a People's Vote party when its manifesto committed it to taking Britain out of the EU.
"Continually pretending that the Labour Party is committed to a People's Vote when the leadership of the party says their first priority is to facilitate Brexit is no longer credible but the People's Vote campaign persist in doing this at the behest of the Labour-orientated people running the organisation," the source said.
However, the People's Vote campaign dismissed the claim that its staff were taking orders from members of the Shadow Cabinet as "ridiculous" and denied interfering in the candidate selection in the Peterborough by-election.
"The candidate took his own personal decision to stand down. Nobody was forced to stand down," a People's Vote the source insisted.
A campaign spokesman said: "We have very clearly caveated what we have said about the Labour Party and we have described as 'mealy-mouthed' their support for a People's Vote."
Meanwhile, John McDonnell, the Shadow Chancellor, told the Wall Street Journal CEO Council conference in London: "Deep in my heart I'm still a Remainer."
Asked if Jeremy Corbyn was too, he replied: “Yes,” pointing out how the two Labour politicians “campaigned together” in the 2016 referendum.
Mr McDonnell’s remarks follow the insistence by Tom Watson, Labour’s deputy leader, earlier this week that the Opposition was a “remain and reform party”.
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