Mayor Karen Williams is suing state Capalaba MP Don Brown for defamation.
Mr Brown told Parliament that Cr Williams was suing him for $10,000 after he raised concerns in Parliament last month that much of $2.88 million in state government money was spent on a project he claimed would benefit the mayor's Mount Cotton business.
Cr Williams has rejected the claims, saying projects were put forward by council officers and that Mr Brown and fellow MP Kim Richards wanted the funds spent on proposals from which they would benefit politically.
She also excused herself from the meeting at which a vote was taken on the matter.
Last week in Parliament Mr Brown attacked Cr Williams over the legal action, saying she wanted to silence him by trying to sue him, demanding $10,000 and then leaking the letter to The Courier-Mail columnist Des Houghton.
The legal action pertained to Facebook posts.
Cr Williams said in a statement that Mr Brown's comments were unfounded and ill-informed imputations made under the protection of Parliament and later repeated on social media.
She said she did not take the legal action lightly but felt the community expected a higher standard of politicians and it was necessary to take a stand for the city.
Cr Williams said she was taking this action herself and it does not involve Redland City Council.
"I am taking this action for the people of Redland City ...," she said.
"The inferences made by Mr Brown in Parliament and on social media suggesting I influenced council's application for recent state government funding are completely untrue and demonstrates that again he hasn't bothered to inform himself about state and council processes.
"... Parliamentary privilege was not designed for MPs to use as a tool for their own personal vendettas by attacking anyone they disagree with or simply don't like."
Mr Brown said he had also lodged a complaint with the Office of the Independent Assessor about Cr Williams' actions.
Cr Williams said a complaint to the OIA was dismissed last week.
In Parliament, Mr Brown also criticised Cr Williams and some council staff over a poll the council ran regarding the Ekka public holiday.
In June, Redlands decided it would not move the Ekka public holiday from a Monday to a Friday in line with other councils.
Council said it had conducted a poll which slightly leaned towards leaving the holiday as it was.
Mr Brown told Parliament that Right To Information documents revealed that as polling continued, the poll started to show a preference by ratepayers to change the public holiday to the Friday.
But a report on the polling given to councillors gave only early voting numbers.
Mr Brown said he would forward the information to the Crime and Corruption Commission for an investigation.