Labour members and supporters in Chesterfield allegedly delivered leaflets to help the Liberal Democrats ahead of the EU elections last week.
Chesterfield MP Toby Perkins has described the claims as 'a storm in a teacup'.
The news comes after Labour said supporting another party was 'incompatable' with membership after it emerged Tony Blair's former spin doctor Alastair Campbell voted for the Liberal Democrats in the elections. Labour has since expelled Mr Campbell, a decision which is now being reviewed by the party.
Nigel Farage's Brexit Party, which wants to leave the EU, was the big winner in the elections while the Liberal Democrats - who want to remain in the EU - came second. Labour and the Conservatives suffered heavy losses.
Paul Holmes, campaigns manager for Chesterfield Liberal Democrats, told the Derbyshire Times: "A number of Liberal Democrats were handing out Liberal Democrat leaflets on Chesterfield market place on the Thursday before polling day.
"Two Labour supporters - I don't know if they were members - were with us that day and another, a Labour member who plays a key role in Chesterfield Labour, stopped to talk to us and told us that they and a number of other Labour members were taking delivery of 12,000 Remain United leaflets the next day which they were going to blanket deliver across Walton, West, Linacre and Brockwell - the four Chesterfield wards with the biggest concentrations of remain voters.
"These Remain United leaflets called on people to vote tactically to beat Nigel Farage and to look on their website to see which party was best placed to do this.
"The website stated that Labour was a pro-Brexit party and that in the East Midlands - as in most of England - the best-placed remain party to vote for was the Liberal Democrats, so for these Labour members to deliver them was a major step."
Mr Perkins said: "It is no secret that there were many Labour supporters who felt that Labour's stance on our future relationship with Europe lacked clarity, and that led to our disappointing performance in the EU election.
"But this story really is a storm in a teacup.
"As a resident of West, I can assure you that no such leaflet was delivered to my door nor did anyone else that I am aware of receive one.
"The Labour Party clearly needs to review our policy on Europe to win back voters, but with the effects of their involvement in the disastrous coalition Government still fresh in voters' minds, it is clear that the Liberal Democrats are not the answer, which is why the Labour Party continues to have more members than all the other parties put together."