The row broke out over the seat being vacated by Labour's Eric Joyce -
the Unite union has been accused of hijacking the process to select a new candidate to replace him, and Mr Watson's office manager was the union's preferred candidate.
Two hours after Mr Watson resigned a Labour spokesman confirmed the party had suspended Falkirk party chairman Stephen Deans and Karie Murphy the Unite-backed prospective candidate, as well as the scheme under which unions could sign up members to the Labour Party and pay the fees on their behalf.
At this week's Prime Minister's Questions, David Cameron repeatedly raised the row between Labour and Unite over Falkirk to try to portray Mr Miliband as a weak leader under the influence of the union - one of Labour's biggest backers.
Briefing notes for Mr Miliband,
accidentally left in a House of Commons toilet on Wednesday, show he was ready for an attack on Mr Watson - although in the event, Mr Cameron did not mention the MP.
www.bbc.co.uk/news/uk-politics-23186851
Some will say that Silliband stood up to the Union - but would he have done so had his notes not been left in a toilet for the press to find ?