Coun Evelyn Stephenson, who represents the town’s Pharos ward on Wyre Council, has vehemently denied the accusation.
She is said to have uttered the words during July’s heated planning meeting in which a controversial flats scheme on the Fleetwood Pier site was given the go ahead.
Coun Stephenson is accused of calling the Tory members of the planning committee ‘a shower of s****’.
Wyre has told the councillor this amounts to a code of conduct issue, which will now need to be taken up by the monitoring officer and could end up becoming a more serious standard issue.
The meeting became heated after the pier plan, an emotive issue in Fleetwood, was approved and opponents of the scheme expressed displeasure at the decision.
But Coun Stephenson, who voted against the building plans, is adamant she did not use any swear words.
Tory councillors in the meeting complained and said she had used the offensive language.
Coun Stephenson, who was due to meet the monitoring officer this week, said: “I did feel strongly and I admit saying something like ‘what a stitch up’ but I definitely didn’t swear.
“I am very unhappy about being accused of that and I will definitely contest it.”
Her husband and fellow Fleetwood councillor Brian Stephenson was at the meeting and said: “Feelings were running high at that meeting and of course people say things in the heat of the moment.
“I didn’t hear the remark myself but I believe Evelyn when she says she did not swear”
Wyre Council said that, as the incident is under investigation, it cannot comment on any of the allegations made.