The row over Labour Party funding has drawn in the party's Scottish leader Wendy Alexander.
Ms Alexander became Scottish Labour leader in September
Ms Alexander is checking the source of a donation to her successful campaign to win the leadership in Scotland.
A spokesman said Ms Alexander's team had acted in good faith but the SNP said Labour "sleaze" had come north.
It comes after revelations that a property developer gave £650,000 to the UK Labour Party through intermediaries, which may breach electoral law.
David Abrahams gave Labour the money over four years under other people's names.
Prime Minister Gordon Brown has described the situation as unlawful and "completely unacceptable".
In Scotland, Ms Alexander's team solicited a donation of less than £1,000 from Paul Green who is based in the Channel Islands.
They were assured that the donation was from a UK-registered company.
Now, following media enquiries, the admissibility of the donation is being checked and the party is liaising with the Electoral Commission.
In a statement, Ms Alexander's campaign manager, Tom McCabe, denied suggestions that a donation had been accepted and then returned.
Mr McCabe said: "Paul Green was invited by one of the campaign team to make a donation as a long-standing Labour supporter."
A donation was later received and Mr McCabe said: "The registered donation was a UK corporate one.
"The allegation that a donation was accepted and returned is untrue.
"We acted in good faith at every stage. The Electoral Commission has been kept appraised."
The SNP has called on Ms Alexander to make public everything she knew about the affair.
A spokesperson said: "The row over Labour's funding sleaze has now moved across the border, right into the heart of the Labour leadership in Scotland.
"It is essential that Wendy Alexander discloses all the relevant facts about this matter."
Ms Alexander became the leader of the Scottish Labour Party in September after the party failed to hold onto power in May's Scottish Parliament elections.
On Wednesday, Mr Brown's competence as PM came under fire during heated Commons exchanges.
The prime minister said he had acted immediately to set up two inquiries into Mr Abrahams's donations and said: "All of us on all sides of this House have an interest in integrity in funding to political parties."