Labour hopes of avoiding another humiliating by-election defeat have been damaged after one of Gordon Brown’s closest allies described a potential candidate as a “thick little bastard”.

Senior party figures are alarmed that Henry McLeish, the former first minister who resigned in disgrace in 2001, has emerged as a frontrunner for the vacant Glenrothes seat, following the death of John MacDougall, the Labour MP, last week.

Some local activists and members of the British government believe McLeish may be the party’s only hope because he is a popular figure locally, having represented the area as an MP and MSP.

Others believe that in the face of a strong SNP challenge, McLeish, who was forced to resign as first minister following a “muddle” over his constituency office expenses, would be a liability.

Privately, senior Labour figures fear that defeat for the prime minister in his political backyard could seal his fate.

A friend of Brown, who is MP for neighbouring Kirkcaldy and Cowdenbeath, said McLeish suffered from “intellectual arrogance”.

He added: “I can’t stand the little bastard. I couldn’t wish it \ on a nicer man. If he wins it he can go into well-deserved obscurity in the House of Commons. If he loses, fine.”

Another Labour MP said: “It can’t possibly be Henry. If we had to put Henry up it would be a wider sign that the Labour party was in deep, deep trouble. If we can’t find a youngish candidate it just shows that the cupboard is bare and we can’t afford that.”

Another said: “It would look as if we had completely run out of talent if we had to go back to someone who resigned in disgrace seven years ago.”

In recent months McLeish has raised eyebrows among some former parliamentary colleagues by demanding more powers for Holyrood and for the Scottish Labour party to be granted autonomy from London.

There is also concern about his closeness to the SNP government. He accepted an invitation from the Nationalists to chair a commission on Scottish prisons and also serves on an SNP-backed body that is examining the future of Scottish broadcasting.

While McLeish, 60, has not declared publicly his intention to stand as a candidate, he has been taking soundings behind the scenes from Labour activisty. Yesterday he pointedly refused to rule himself out, adding that he would make his position clear following MacDougall’s funeral tomorrow.

The SNP is already the clear favourite to win Glenrothes. It won the Central Fife seat from Labour in last year’s Scottish parliament elections and has built momentum following its victory in Glasgow East last month with a 22.6% swing.

The Nationalists need a 14% swing to overturn MacDougall’s majority of 10,644.

Despite widespread opposition to McLeish, some of his harshest critics acknowledge that he may have the profile to win the seat.

“Henry is vastly overrated,” said a government minister. “But frankly we would take anybody if we could win the seat.”

A Labour MSP added: “It’s a hard fight to take on, but McLeish has got the balls. It would be difficult for the SNP to attack him because they agree with a lot of what he says.”

There are signs that Labour may struggle to find an alternative candidate. Christine May, the ex-MSP for Fife Central, has ruled herself out, as has Alex Rowley, the Labour opposition leader on Fife council.

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