Prosecutors have been asked to investigate Scottish Labour leader Wendy Alexander's failure to report around £10,000 in donations to her leadership campaign.
The Scottish parliamentary standards commissioner Jim Dyer has asked the procurator fiscal to investigate after deciding the donations were gifts to Ms Alexander as an MSP and should have been reported to Holyrood.
The procurator fiscal may in turn report the case to the police, with a criminal investigation making it highly unlikely Ms Alexander could continue to ignore calls for her resignation.
Ms Alexander, who is the sister of Brown ally and Cabinet member Douglas Alexander, has rejected calls for her to stand down, insisting the inquiries are a "distraction".
The Scottish Labour leader is already the subject of an Electoral Commission inquiry for accepting a £950 donation from Jersey-based Paul Green. As Mr Green is not on the electoral roll it is thought likely the commission will rule it was a non-permissible donation.
She now faces further questions over ten donations of between £950 and £999 which were not declared.
Ms Alexander claims her team sought advice on the money in November. She says that Mr Dyer's office told her that as she was not a signatory on the account she did not have to declare them.
Last week, however, the parliamentary standards commissioner appeared to change his mind and rule the funds had been gifts to Ms Alexander as an MSP and should have been declared.
Ms Alexander's campaign team reportedly started cashing the cheques on August 31st and did not seek guidance until November 8th. She has not explained the time delay.
Speaking to BBC Scotland's Politics Show she said: "The issue is whether leadership election campaign contributions are gifts and that is the point that the procurator fiscal will have to decide.
"In every other leadership campaign, they've never been construed as gifts."
Ms Alexander continued: "I think it's wholly inappropriate that if you follow the advice of the parliamentary authorities, that should be used to call for your resignation."
She is said to have the support of Labour MSPs, as well as the Labour leadership in Westminster.
Michael McMahon, Labour's chief whip at Holyrood, told the Times: "Surely, the question is why she was given the wrong advice in the first place. We need to get her through this and we will emerge stronger."
But Scottish finance secretary John Swinney doubted her future.
He told the Politics Show: "Quite clearly, Wendy Alexander is in a very, very weak position as a result of the battering that she's been taking on this particular question for many weeks.
"If the parliamentary standards commissioner has felt it necessary to report Wendy Alexander to the procurator fiscal, then the Electoral Commission has absolutely no alternative."