George Kerevan - who was to fight the Caithness and Sutherland seat, which includes Dounreay - said he was resigning because of travel difficulties from his Edinburgh home.

But Labour members seized on his resignation to highlight the claims over his Dounreay involvement.

Mr Kerevan, a former Labour Edinburgh councillor who defected to the SNP, said: "I have experienced many logistical and transport difficulties that has made fulfilling the role increasingly difficult.

"I think it is a winnable seat for the SNP but for a candidate who is full-time and more locally accessible."

It had been reported in the Scottish press that he had been in secret talks with the UK Atomic Energy Authority about the Dounreay nuclear plant.

Party nuclear 'U-turn'

The SNP has been implacably opposed to nuclear power and in its election manifesto, pledged to phase it out.

But the UKAEA said the party was considering toning down its tough anti-Dounreay stance, although SNP chiefs furiously denied this.

Deputy Scottish Secretary Helen Liddell linked Mr Kerevan's resignation to the allegations.

"It is no coincidence that Mr Kerevan has quit the day after revelations that the SNP are planning a policy U-turn over Dounreay which is in the constituency he was due to contest," she said.

"It was revealed he'd been holding secret talks with the UKAEA. It was proved that they were saying one thing in public and the opposite in private.

"How can anyone believe he resigned over travel problems the day after SNP double-dealing was revealed?"

Mr Kerevan said that he notified senior members of the constituency association on Saturday after campaigning for the north east Euro by-election was over.