Old dog aggression towards new puppy

Question
We had three dogs for 12 years.  The Akita, who died one year ago, was top dog.  The Heeler, who died three weeks ago, was second, and the Lab, who is now 11 years old, was the low dog to both the others.  The Lab has always been non--aggressive to the other dogs, but is a hunter-, retriever and will retrieve shot birds and chase, catch, and kill rabbits.  He has never been interested in playing with toys, nor does he ask for petting or sweet talking.  We have always been affectionate with him, but he is not cuddly and would move himself away when he had his small fill.  Before the Heeler died, the Lab would do his mile or two hike every day with us, then come home, eat, and sleep on his bed.  About the only times the Lab gets excited is at meal time, dog biscuit snack time, then out doors to do his business before retiring to his bed by our bed!   

We took the opportunity to get an eight week old Heeler pup for an exceptional price.  She was one of four pups who lived the first 8 weeks of her life with her mom,auntie, and humans.  We introduced the Lab and Heeler puppy in the truck, me holding puppy, on the short trip to the vet clinic.  The Lab, on lead, smelled the puppy's bottom and tried to grab her by the scruff with his mouth.  My husband took the Lab for a two mile hike while the puppy got examined.  At home, we have been keeping the Lab on lead and let him watch the puppy play with toys that were our old Heeler's.  We still try to get the Lab to play, but he seems most interested in grabbing up the puppy by the scruff or pawing her under him.  We are afraid that he thinks she is prey, like a rabbit.  We feed them separated on leads and keep them from nosing into each other's bowls.  When the puppy is in her crate asleep we let the Lab out of the room where he sleeps at night, and when the puppy is awake for playing, human socializing, we put the Lab back in his sleeping room.  

What can we do to make this situation more "normal" to what we had for living with the three dogs together?  Will the Lab's hunting instincts keep him from recognizing the puppy as a dog rather than a large rabbit???

Answer
Your Lab seems to have been bonded to your other dogs; he is not particularly bonded to humans.  You must prevent this from happening with your new puppy (although it doesn't seem likely at present.)  Dogs cannot spend the majority of their time together; pups need careful and constant socialization to their humans, and all other humans, on a daily basis through the first year of life.  The Lab is no doubt at an enormous loss, both grieving his pack mate (the one who recently passed) whom he perceived as his "leader" and at a total loss as to what to do with himself.  He is depressed, extremely so.  To make matters worse, this prey-sized object (although he must recognize the scent as dog) is now in the house and (even worse) playing with his former "leader's" toys!! Give the old Heeler's toys to the Lab, put them into his sleeping space; buy the puppy new toys.  The puppy is presently in a fear phase: 8 to 10 weeks (give or take a week or so) is a natural fear phase for the domestic dog.  You must protect this puppy from any and all aggressive interaction with your older Lab or she will become fearful (perhaps lifelong) of other dogs.  It's possible this scruff grabbing is nothing more than a natural instinct (that is the way dams carry their pups) but it might also be far more aggressive.  I can't see that from here.  You need to have this behavior closely observed by a certified applied animal behaviorist who can visually determine what your older dog is thinking and what his motives are.  Body language says everything (as that is the primary way dogs communicate to one another).  Ear set, eye movement, tail set, etc. communicate intention, but these can be subtle.  At age 11, it may be impossible to habituate this older dog to a puppy.  He may be incapable of accepting a neonate or simply not feel well enough (physically and now, emotionally) to do so.  Call your veterinarian and ask for referral to a specialist who can come to your home.  If the Vet is unable to provide you with the name of a real professional (beware of dog trainers, the wrong approach could spell disaster), call the veterinary college in your geographical area and ask for referral.  Although this situation can most likely be rehabilitated, I can't take the chance of making the wrong determination (since I can't meet both these dogs and evaluate in person).  The wrong approach could spell death for that puppy or serious injury.  The older dog also needs some rehabilitation, and can (even at this late date) most likely be helped to interact more happily (and more emotionally fulfilling) with you.