Labour's immigration spokesman, Chris Bryant, had to amend planned criticism of Tesco and Next over claims they preferred eastern European workers.
According to extracts published in the Sunday Telegraph, Chris Bryant was reportedly due to attack the "unscrupulous employers" who recruit cheap labour from Eastern Europe.
After a furious response from the companies, Mr Bryant reportedly dropped key passages from the speech.
However the shadow immigration minister denied that he ever intended to call either firm "unscrupulous".
During the speech at the IPPR centre-left think-tank in London, Mr Bryant praised Tesco as "a good employer and an important source of jobs in Britain" but questioned its recruitment policies at their new distribution centre in Dagenham:
"Tesco are clear they have tried to recruit locally. And I hope they can provide more reassurance for their existing staff. But the fact that staff are raising concern shows how sensitive the issue has become."
The Labour MP also criticised Next for using a recruitment site that was "entirely in Polish".
Tesco said they "absolutely refuted" Labour's claims, insisting they "work incredibly hard" to recruit staff locally.
The company later released its recruitment policy for its new Essex distribution centre which promised to do "everything possible to secure as many positions possible for colleagues at Harlow DC [distribution centre] to transfer to the Dagenham DC" and to "engage with the local people."
Next said they were "deeply disappointed" by the claims and argued that they only employed Polish agency workers to help manage the "short burst of activity" over its popular summer sale.
Mr Bryant did receive support from Conservative MP for Harlow, Robert Halfon, who branded Tesco "ruthless" for its decision to shut its Harlow distribution centre and move to Dagenham.