Respect party representative Abdul Aziz claims that Labour spent £10,000 to gain a 666-vote majority and oust him from the ward of Aston in Birmingham.
A community leader told Newsnight that he had been offered £20 for every postal vote he rigged and a drug addict claimed he was paid £5 for every vote he cast - netting himself £125.
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Muhammed Afzal yesterday faced an election court charged with corruption
Muhammed Afzal, the Labour candidate who won the ward in this year's council elections, yesterday faced an election court charged with corruption following allegations he libelled his Liberal Democrat opponent.
Mr Aziz said: 'If the electorate does vote you out, that's fine fairly and squarely but I felt I was cheated out of my seat this was confirmed subsequently when I overheard one of the officials of the Labour party saying that they'd actually paid about £10,000 for votes in this area in the 2007 election. That was just despicable.'
A community leader, who did not wish to be named, said he was approached by a Labour activist just before the election.
'He says I'll give you £20 per postal vote – I thought this guy was taking the Mick – He had a brown envelope next to him – he pulled out a wad of cash, he pulled out four £50 notes and said here's £200 – I didn't take the money but he kept phoning me,' he said.
'He was asking me for postal votes. He wanted me to leave them unsealed. You don't think someone's going to come and ask you to rig votes and stuff like that.'
It comes after a judge found six Labour councillors guilty of electoral fraud during 2004's council election in two Birmingham wards - one of which was Aston - that he said the episode would "disgrace a banana republic''.
Richard Mawrey, QC, sitting as a High Court judge two years ago, said the councillors were responsible for a "massive, systematic and organised fraud'' that was supported by the local Labour Party.