Labour is calling on the Tories to consider withdrawing a new poster it claims is "based on lies".
The Conservative poster went up on billboards and social media after The Sun reported that Labour chiefs have held secret talks with Sinn Féin about forming a post-election coalition.
But a senior Labour source told BuzzFeed News: "The British people deserve better than a politics based on lies. This story is untrue. The Conservatives need to think carefully about this poster."
David Cameron even raised the story at Prime Minister's Questions.
He told MPs: "We have seen Labour casting around for a coalition with the SNP and a coalition with Sinn Féin – the first time Britain would have people who want to break up Britain and bankrupt Britain. What a useless shower."
A Tory source later warned: "Ed Miliband is like a desperate drunk at closing time – he'll flirt with anyone in his search for power."
Labour has confirmed that Miliband met Sinn Féin's Martin McGuinness during a recent visit to Northern Ireland. But a source insisted their talks related only to the peace process and neither spoke about post-election coalitions.
Sinn Féin has five MPs but they refuse to take their seats in the Commons. It has dismissed the story as "fantasy".
In a statement, Sinn Féin MP Conor Murphy said: "Sinn Féin's position on Westminster is very well known. We work hard in delivering a good service to our voters but we do not take our seats in Westminster. We have met with all of the major British political parties in the line of our work as MPs over many years and have made this clear time and time again.
"None of these parties have ever asked us over the course of these meetings to support them on the other side of an election."