Natalie McGarry faces being hauled to court over her “holocaust denier” jibe.
The Fife-born MP is said to have been served a writ by solicitors following the Twitter outburst at Scotland in Union chief Alastair Cameron earlier this month.
However, the exact legal position has been disputed by Ms McGarry’s lawyer.
Lawyers for Mr Cameron said today they are taking legal action over the “inaccurate and offensive allegation” after Ms McGarry failed to respond to a request for a “full, public and sincere apology and an agreed charitable donation”.
Mr Cameron, who is the director of the pro-Union movement, said: “Reluctantly, I have been forced to take this action because of Ms McGarry’s failure to respond to my request for an appropriate apology for her offensive and inaccurate comments on Twitter.
“It is not acceptable for a Member of Parliament, in a public position of power and responsibility, to make such an awful accusation against someone and then simply brush it off.
“I am still optimistic that we can resolve this quickly and amicably, and my solicitors await a response from her.
“We look forward to drawing a line under this regrettable incident and moving on from smears and unfounded accusations to a more decent and respectful political discourse in Scotland.”
The MP’s lawyer, Aamer Anwar, said: “Having spoken to Ms McGarry this morning, she has confirmed that no writ has been served on her. There will be no further comment.”
Ms McGarry resigned the SNP whip amid a police probe into missing funds at Women For Independence, the group she co-founded. She denies any wrongdoing.
She posted and then deleted the tweet earlier this month, before adding: “I’d add however, that you should be careful who is distributing your materials, but apologies etc.”
Ms McGarry’s office has also been contacted for comment.