Councillor Joanne Hadley’s claim follows a formal complaint to Labour officials accusing her of making ‘serious accusations’ against fellow party members.
Labour’s national complaints department was also given a number of recorded telephone calls involving Councillor Hadley.
She said: "I have recently been made aware that a secret, covert recording was made by a trade union official. He alleges the recording had been stolen from his computer by individuals.
"I believe the contents of the recording has been tampered with to show me in a bad light and I have reported the matter to the police."
The scandal is the latest in a series of claims and counter claims which have split the ruling Labour group on the authority.
Privately, some party members are calling for national officials to step in and ‘press the reset button’ in attempt to bring warring factions to heel.
Last week, the authority’s standards board was told a number of Sandwell councillors were being investigated for allegedly breaking Covid-19 rules.
In July, the then political leader of the council, Councillor Yvonne Davies, accused her opponents of corruption, racism and misusing public money as she stepped down following claims she re-tweeted anti-Semitic messages.
Her forced resignation was the second in 19 months after Steve Eling also resigned after his party membership was suspended.
At present Sandwell Council is investigating 12 complaints of breaches of the authority’s code of conduct by elected members.
Sandwell Council chamber presently has three independents, one Brexit Party member and 63 Labour councillors.