The National Education Health and Allied Workers' Union (Nehawu) will take legal action against former Cosatu boss Willie Madisha for accusing it of using union resources to fund its political allies, it said on Monday.

"The union rejects these baseless and malicious allegations and has taken a decision to institute legal proceedings against William Madisha for tarnishing the honour and good name of the organisation," Nehawu said in a statement.

At the launch on Saturday of a new "independent" trade union federation, co-ordinated by Madishahe, he accused Nehawu of using R20 million to pay the salaries of leaders of the SA Communist Party and funding the ANC's election campaign.

Nehawu said it had instructed its attorneys to take legal action against Madisha for publicly making allegations about it without any evidence.

Madisha could not immediately be reached for comment.