Doncaster councillor Nikki McDonald, who is not standing in the coming elections in May, will see out her tenure on the Town ward as an independent.
She said she did not stand for re-election to the Labour-run authority due to a number of issues including the apparent suspension of Labour members across the country.
Coun McDonald, who was elected in 2017, said the national party was suspending branch chairs and secretaries for passing motions in support of former leader Jeremy Corbyn.
She also hit out at the body who runs council elections – the Local Campaign Forum – for its ‘acceptance of an appallingly poor councillor application system’.
But she added the ‘final straw’ was the announcement by shadow defence secretary and Wentworth & Dearne MP, John Healey, that Labour’s support for keeping nuclear weapons in the UK is “non-negotiable,”
Commenting on the resignation, one senior Labour source described the letter as ‘rambling’.
Doncaster is described by Keir Starmer as a "place close to my heart". He gave his speech to Labour's annual conference from the town in a virtual address last September and recently visited local flood victims. His wife Victoria’s mother was brought up in the town.
Coun McDonald said: “I have struggled with my social conscience since the new leadership of Starmer and (deputy leader Angela) Rayner lied their way into office by stating they would unite the Labour Party – nothing could be further from the truth.
“Decent democratic socialists, which this party is supposed to be, have been victimised, bullied and suspended.
“Dictats on an almost daily basis are enforced including preventing democratically reached motions being sent in from branches on a range of issues including ‘support of Jeremy Corbyn’ or ‘no confidence’ motions in Starmer or Rayner.
“If they were sent in it resulted in branch chairs and secretaries being suspended, the latest dictat is preventing selected candidates in Liverpool from standing as mayor and the process runs again without them.
“This is part of the bullying dictatorship that now exists in the ‘new leadership’ , which should have no place in the Labour party I came to know under Jeremy Corbyn’s leadership.”
A spokesman for Sir Keir’s office said they didn’t want to comment.
Elections for both the mayor, council and parish councils will take place on Thursday, May 6.
Sir Keir will target the Government's controversial one per cent pay rise for NHS workers during the campaign for the May elections, declaring "a vote for Labour is a vote to support our nurses".
The Labour leader is to launch the party's campaign for the local and mayoral elections by demanding key workers are given "a proper pay rise" at a virtual event on Thursday.
Prime Minister Boris Johnson's move to recommend the low increase for health workers in England, despite their year-long toil during the coronavirus pandemic, has been widely criticised.
Sir Keir, who has been seen to be struggling to overturn the Tories' popularity after taking over the Labour leadership, will hope focusing on nurses' pay will provide his campaign with much-needed momentum as he tries to centre the elections on Britain's recovery.