Speculation was growing last night that Wendy Alexander, the Labour leader in Scotland, is about to resign.

It comes after a Scottish Parliament Committee decided this week to suspend Ms Alexander from proceedings at Holyrood for a day for breaking the rules on declaring donations to her leadership campaign. Her resignation would be a huge blow to the Prime Minister in his political backyard.

There was more woe for Gordon Brown last night when it was reported that David Marshall, the veteran MP for Glasgow East, had decided to resign from the Commons because of ill-health — which would prompt a by-election that would give the Scottish Nationalists a big opportunity.

Mr Brown has long been a political patron of Ms Alexander, and backed her for the top party post in Scotland last autumn.

Although no one close to Ms Alexander would confirm that she would be making a statement today or was on the point of quitting, ministerial sources in London said that she was considering her position. “She has been up and down all day wondering what she should do,” one source said.

It has been a tumultuous year for Ms Alexander after it emerged that her leadership campaign had received a donation from a Jersey-based businessman, Paul Green. She claimed that she had been exonerated after the Electoral Commission gave a qualified “not guilty” verdict on that issue but it then emerged that Jim Dyer, the Standards Commissioner at Holyrood, had decided to conduct his own investigation into other donations.

Ms Alexander’s defence was that parliamentary officials had told her she did not need to register the donations in the MSPs’ register of interests. Dr Dyer received contrary legal advice and found her guilty of breaking the rules. That verdict was confirmed by the standards committee.

Ms Alexander has also been involved in an internal Labour Party row over her support for a referendum on Scottish independence.

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