The row threatening Ed Miliband's relationship with the unions was triggered by complaints from just two families recruited to the Falkirk Labour Party.

The Labour leader is preparing to defy calls for him to deliver a personal apology to Unite and two of its officials at the TUC conference this Tuesday, after an internal report alleging vote-rigging in the central Scotland constituency's process of electing a prospective parliament candidate was described as "flawed" and withdrawn by the party. When the row blew up in July Mr Miliband said the alleged behaviour was "part of the death throes" of a "hated" type of politics.

The report is said to have cleared Unite of claims it tried to rig the selection of a candidate to replace the current MP, Eric Joyce, by signing up new members without their knowledge. The fall-out from an internal party investigation led to Mr Miliband announcing sweeping reforms of Labour's links with the trade unions.

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The letters of complaint at the centre of the row were allegedly written by a former leader of Falkirk Council, Linda Gow, herself a prospective candidate, on behalf of two families from Bonnybridge in the constituency.

One of the allegations against Unite was that the Scottish chair of the union, Stephen Deans, who was also the chair of the Falkirk West CLP, had "signed up" families near his workplace, Bonnybridge, in order to dominate the selection battle.

The IoS has been told that the Labour investigation looked at one recruited family of three who wanted to know why their ex-directory telephone number had apparently been handed to a national newspaper. Another family of five complained about a direct debit payment to the Labour Party that no one in the family admitted knowing about. Neither family had members who belonged to Unite.

A further emailed complaint sent to Labour's party headquarters over the direct debit payment, alleged the family had been bullied into signing. This is said to have initiated a wider investigation. The allegation of bullying was contained in a draft report that cited the potential recruitment of 20 other families across Falkirk's two adjoining constituencies, around 140 members.

Although the family later explained that the wife had signed the form, but failed to tell her husband, the bullying allegation made it into the full report that eventually ended up on Mr Miliband's desk.

Mr Deans and another Unite member, Karie Murphy, the former Westminster office manager of MP Tom Watson who had entered the selection contest, were both suspended amid allegations that Unite was improperly trying to win the contest for Ms Murphy.

Two experienced criminal lawyers were recently sent by Unite to interview the two families. Labour sources say the lawyers, John Paul Mowbray and Gerry Britton, who both work for the defence solicitor Liam O'Donnell, were sent to speak to the families after the police were called in to examine any potential criminal wrong-doing. However no action was taken by the police.

Mr O'Donnell has confirmed that Mr Mowbray was "handling that matter". Senior Labour sources deny the lawyers had any influence on the internal investigation or on Unite being cleared because evidence had been withdrawn.

Neither Mr O'Donnell or the other two lawyers offered to comment on what had been discussed with the families or what had been reported back to their client, Unite.

Mr Watson said both Ms Murphy and Mr Deans were owed an apology after being put through hell on the basis of a "flawed" and inaccurate internal report. He told the BBC yesterday it would be "very gracious" if Mr Miliband made a personal expression of regret after they had been cleared by the internal report, and their suspensions lifted. "I've looked at the detail of this since standing down and the problem they had at the start was that the report was flawed, it was inaccurate factually."

Bob Crow, leader of the railworkers' union, agreed. He said yesterday: "If there aren't going to be any charges against Unite, a personal apology should follow."