What started off as a strategy clash between Iglesias and his deputy has morphed into party-wide infighting and accusations a tiny clique is scheming to push out old-timers and take control of a grouping that embodies the hopes of Europe's radical left.
A "climate of terror", "a logic of persecution of the internal enemy that recalls the worst traditions of the left", "a toxic dynamic" are just some of the expressions used by several people who helped the charismatic, pony-tailed Iglesias found Podemos in 2014.
Meanwhile, millions of voters are watching with dismay as their party rips apart after having managed to rise from nothing to become Spain's third political force in just two years.
Such is the internal strife that Carolina Bescansa, lawmaker, co-founder and one of the most visible faces of Podemos, has decided to stand down from any position of authority, along with another high-profile party member.
"What we are saying is stop this - someone had to say it - otherwise it would look like the political leadership of Podemos doesn't hear or listen to what is happening outside," Bescansa told AFP Wednesday.
"There is a clamour within Podemos, coming from the activists, the voters, that this dynamic cannot continue.
"It's a toxic, irresponsible and unproductive dynamic that is hurting the (Podemos) project and those who are involved."
The battle comes to a head at the weekend when 10,000 Podemos supporters converge on a congress centre in Madrid to vote for a new leadership council, secretary general, and what strategy to take to steer the party towards taking power.
Iglesias, his deputy Inigo Errejon and their respective teams diverge on this, and both have drafted competing lists of candidates for the leadership council.
Errejon wants Podemos to follow what has been dubbed a more moderate route, which is to continue to struggle for change -- but from within the opposition in parliament, where it now has 71 lawmakers as part of a coalition after coming third in elections.
He says the time has come to stop being the "enfant terrible" of Spanish politics, which he argues is preventing some wary voters from rallying to the cause.
Iglesias, though, believes this is not enough.
He wants Podemos to go back to the streets in droves and shake things up as a protest party -- just like it did when it was first born out of anger over austerity at the height of the economic crisis.
Errejon is not standing for secretary-general, which means Iglesias is quasi assured of being elected Podemos chief again as the only other candidate is a low-profile lawmaker.
But Iglesias has warned that if his list of candidates and strategy don't go through, he will step aside.
What would happen then is anyone's guess.
'Future belongs to us'
Beyond strategy differences, however, lie power struggles so damaging that many of those who were in Iglesias's team at the start have left, some of them siding with Errejon and others remaining on the sidelines.
Luis Alegre, one of the party founders who was sidelined months ago, launched a stinging attack on Iglesias's current entourage at the weekend, describing them as a "group of plotters" pushing everyone else out to take control of Podemos.
"I still can't understand how Pablo allowed it. I've been his friend for more than 20 years and I know he isn't like this," he wrote in an article on online daily eldiario.es that made waves.
Iglesias and his entourage have largely stayed silent on the attacks, insisting that voters and supporters are more than fed up of them airing their dirty laundry in public.
Whatever the outcome, those involved in the in-fighting - and those who have stayed away - believe tempers will die down after the congress.
"Politics is always a long-term process in which you can't only look at the short- and medium-term," Iglesias said this week in an interview with the La Vanguardia daily.
"If we are capable of doing things right, the future belongs to us."
By Marianne Barriaux and Michaela Cancela-Kieffer