Councillor Olwyn Peters, a council cabinet member, said a "culture of bullying" exists in the local party.
It comes after the party was reviewed in 2012 due to complaints of bullying and intimidation between members.
A Labour spokesman said the party has made a "number of changes" to the way the group operates since then.
The BBC published details of the internal Labour Party report that described the Redcar Council group as being "dysfunctional" and having "serious failings".
The report, written in 2012 by Darlington councillor Nick Wallis, found that a culture of "group bullying" existed within the council group and that he received reports of members "physically intimidating" each other.
Ms Peters, who is a former ceremonial mayor of Redcar, recently passed an initial selection process to stand as a Labour candidate in this year's local council elections.
She said she wants to stand as a candidate who believes in "openness and transparency".
"Let's make it absolutely clear. It makes me cringe when people say that the Labour group in Redcar and Cleveland is dysfunctional. I would just like to clarify that it is not," she said.
"There are a handful of people in that group that are dysfunctional and are all out to cause trouble, not the Labour group.
"The culture of bullying within the group is very much alive and well, people are almost being silenced."
A Labour party spokesman said: "Since the Wallis report was written The Labour Party has worked with the Redcar Group to implement a number of changes in the way the group operates.
"Nobody has yet been selected as a candidate to stand, this will be done by local members over the coming weeks.
"We are confident that local Labour members will select a united and talented team of candidates who will put the interests of the people of Redcar and Cleveland first in the elections this May."
A leading member of the Redcar and Cleveland Council Labour Party says she suffered a "mental breakdown" due to internal party fighting.