Wendy Alexander has said she will not step down as Scottish Labour leader, after being reported to prosecutors for not declaring donations.
The Holyrood watchdog referred her to the procurator fiscal for not recording gifts to her leadership campaign in the MSPs' register of interests.
Ms Alexander described the development as a "distraction", and insisted she had followed all guidance.
However, her opponents said she was now in a weak position.
The fiscal will decide whether the case merits a police investigation.
Ms Alexander, who said parliament officials wrongly told her it was unnecessary to declare donations, has since updated her register with details of 10 donors who each gave about £1,000 to her leadership campaign.
She said she took the action after Scottish parliamentary standards commissioner Dr Jim Dyer took advice from a senior QC and decided the donations should be treated as gifts, before passing the case to the fiscal.
Ms Alexander told BBC Scotland's Politics Show she had followed the guidance at every stage and acted promptly upon it, saying of the referral to the fiscal: "I certainly think it's a distraction, but the important thing is I'm getting on with my job."
She went on: "I think it's wholly inappropriate that if you follow the advice of the parliamentary authorities, that should be used as a reason to call for your resignation.
"The issue is whether leadership election campaign contributions are gifts and that is a point on which the procurator fiscal will in due course have to decide.
"In every other leadership election campaign, they've not been construed as gifts."
Meanwhile, the Electoral Commission is continuing to separately investigate an illegal donation to Ms Alexander's leadership campaign.
The £950 donation from Jersey-based businessman Paul Green broke electoral law because he is not a UK voter, but the Scottish Labour leader said she remained confident of being cleared of any "intentional" wrong-doing.
Ms Alexander told BBC Scotland: "Everybody is as frustrated as I am by the length of time that it's taking the Electoral Commission to come to a conclusion, but they need to be allowed to get on with their job."
Scottish Finance Secretary John Swinney told the politics show there needed to be urgent progress on the commission's probe.
He went on: "Quite clearly, Wendy Alexander is in a very, very weak position as a result of the battering that she's been taking on this particular question for many weeks.
Mr Kerr submitted his declaration several days late
"If the parliamentary standards commissioner has felt it necessary to report Wendy Alexander to the procurator fiscal, then the Electoral Commission has absolutely no alternative."
It also emerged that Labour MSP Andy Kerr has been reported to the fiscal, for late registration of hospitality from McDonald's.
The former Scottish health minister said he had made a mistake when a declaration he submitted on 7 September, for an event held on the weekend of 3 and 4 August was four days late.
He received hospitality worth £570 and match tickets worth £450 which he said were auctioned, with the proceeds going to the Kilbryde Hospice Campaign charity.
Mr Kerr said there was no attempt to disguise his attendance, but the East Kilbride MSP added: "All of that being said, it would be clear to anyone that given the public knowledge of my attendance that this simply boils down to and error on my part, which I regret."