Hackney council in east London has long been plagued by in-fighting and allegations of corruption. Recently it has been torn apart by rows over a headteacher who criticised the ballet of Romeo and Juliet and a school shut by a government “hit squad”.

In the latest twist, five members of the so-called Manifesto Group - including the chair of the education committee - face being stripped of office after a Labour’s national executive committee inquiry accused them of organising against party rules to decide their own policies.

It all took place against a backdrop of allegations of corruption and racism, official inquiries and disciplinary hearings. Housing director Bernard Crofton, a vocal critic of council malpractice, was sacked and reinstated. Outspoken education director Gus John resigned, accusing councillors of behaving like gangsters, and is taking his case to three industrial tribunal hearings.

Both sides call themselves moderate Labour loyalists. The argument, says David Phillips, chair of the council’s education committee and one of the five being disciplined, is about management style.

Mr Phillips places himself firmly on the Blairite wing of the Labour party and accuses members of the “old guard” - ousted last year from the dominant position they had held since the 1980s - of being heavy-handed and out of touch with the local community.

“I didn’t get myself elected to overturn the leadership,” he says. “But like a lot of other people, I was aware of the autocratic way the council was being run, its lack of consultation with the community. It was the old municipal Stalinist way of running things, with a small, tightly-knit group at the centre.”

He said the heavy-handedness became obvious when Jane Brown, headteacher at Kingsmead primary school, was pilloried in the popular press for refusing to take children to Romeo and Juliet because it was “blatantly heterosexual”. The then education director Gus John backed calls for Ms Brown’s sacking. The school governors backed their head. Mr Phillips, by now chair of the education committee, accused council managers of interfering in the business of the school’s governing body.

The council again made national headlines when Hackney Downs school, in an impoverished part of the borough and suffering from chronic under-achievement, was threatened with closure by an educational association.

Gus John, like hit squad member Michael Barber, a former Hackney education chair who is now professor of education at London University and advises Labour leader Tony Blair, argued for closure. Mr Phillips came out against it.

Mr Phillips says the solution should have been on the lines of Labour’s official “fresh start” policy of getting rid of incompetent staff and giving it a new name.

“We were concerned about the future of the children. Gus John’s solution was to shut the school and move them to another one. I was desperately worried that the older boys would end up on the streets and the younger ones wouldn’t be able to adjust. We had the same objectives but different ideas about how to reach them.”

Professor Barber sees the episode differently. “Some of the people who have been suspended behaved incredibly irresponsibly and undermined a lot of the good work that had been done,” he says. “The council took the decision to close Hackney Downs in October 1994. But about three weeks before it was set to close, after David Phillips had taken over as chair of education, the group changed its mind. You can’t play round with children’s lives like that. ”

Mr Phillips is adamant that the Manifesto Group only ever met to discuss tactics for winning control from the old guard, never to decide policies, and claims it disbanded soon after the elections which saw its supporters voted into several committee chairmanships last year.

But the group’s opponents are adamant that it did meet to decide policies, boycotted a crucial budget meeting and created a public row over selecting the mayor.

“It paralysed decision-making,” says Labour group secretary Julie Grimble. “Regardless of the rights and wrongs of the issues, it was bad for Hackney. Open and democratic debate stopped and the whole thing became entrenched around personalities. It wasn’t a case of Left and Right. People claim to be Blairites on both sides. Now the aim has to be to get back to discussing the issues and running the council.”

The fate of the suspended five will finally be decided by the Labour’s national constitutional committee this autumn. Ironically, a group of councillors who see themselves as crusaders against old-fashioned Labour town hall politics are among the first victims of Tony Blair’s new broom.

“Our only concern is to see that Labour councillors are doing their best for the people of areas like Hackney,” said a party official. “Anyone who gets in the way will be dealt with very firmly.”