A Croydon Labour councillor has been sacked from the group after conducting secret meetings with local Conservatives.
Councillor Mike Mogul, a West Thornton ward member, has been removed from the group with immediate effect by the Labour group whip.
The Labour group described it as an action "taken only in the most serious cases".
It is understood that Coun Mogul is expected to join the Conservatives in May if he is accepted by council leader Mike Fisher.
Councillor Tony Newman, leader of the local Labour Party, said: "The Labour Party has taken this action after receiving information that Councillor Mogul has been meeting in secret with the Conservatives and collaborating with them to undermine hard working Labour councillors.
"It has also come to light over the last 24 hours that there is a possible conflict of interest, concerning Coun Mogul's role on the planning committee and his business interests. This is still under investigation."
Labour's chief whip, Raj Rajendran added: "It is unacceptable that Councillor Mogul has betrayed the trust of his constituents and ward members, although with his complete lack of principles he should feel at home in David Cameron's Tory Party.
"Labour councillors and the wider Labour party all agree these are not the actions of someone we would wish to hold office in the name of the Labour Party."
Local Labour Party members are now calling on Coun Mogul to stand down from the council and say it should be up to the electors of West Thornton to decide which party they want to represent them on Croydon Council.
Coun Fisher, however, denied his new town hall counterpart had been dismissed. He said: "I am delighted that Mike Mogul has decided to join the Conservative group but I find it surprising that Coun Newman is suggesting he was sacked when I have a very different version of events which showed he resigned."
Coun Mogul was unavailable for comment when contacted by the Croydon Guardian this morning.
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