Labour was facing claims last night that it has been forced to axe its campaign co-ordinator in the Hartlepool by-election amid protests that he was not local enough.

West Midlands MP Tom Watson was drafted in to run the party's campaign to hold on to Peter Mandelson's seat after masterminding the retention of Birmingham Hodge Hill for Labour.

But he is to be replaced by North-Easterner Fraser Kemp, the Labour MP for Houghton and Washington West and a Government whip.

Labour maintains the move was planned all along, although news of it came hard on the heels of the row over Mr Watson's attack on Liberal Democrat candidate Jody Dunn for defending heroin addicts in court.

The Lib Dems were last night refusing to attribute Mr Watson's departure to the row, which erupted when he sent out a press release saying barrister Ms Dunn was "soft on drugs." It led to a stern rebuke from Lib Dem deputy leader Sir Menzies Campbell who demanded that Labour refrain from "personalised and unjustified attacks."

But UKIP candidate Stephen Allison claimed that Mr Watson's exit was an act of desperation by Labour following a local backlash against outsiders.

He said: "I think it's an admission by them that they've lost the confidence of the people of Hartlepool by keeping bringing people in from outside the region, and I think it's a sign that they're desperate."

Mr Watson said: "I came up to set the by-election up. I was asked to do it because I have by-election experience from Hodge Hill. But obviously someone from the region is better."

Mr Kemp confirmed: "I'm the new campaign manager, and I'll be starting up in early September. Tom came up for the first couple of weeks to give a hand, but it was never intended he would do the whole campaign."