Sly Bailey, TMG chief executive, said: "The Audit Commission’s involvement has been a complete waste of time, as we knew it would be.

"The government should stop trying to pass the buck to bodies that cannot tackle the core issues and must take direct action and intervene immediately before it is too late."

Her comments followed the Audit Commission’s ruling that council newspapers were not a misuse of public money and did not pose a threat to local newspapers.

However, the Newspaper Society (NS) pointed out that the Audit Commission carried out research which found that 90% of councils produce a publication, of which 47% carried private sector advertising.

NS director David Newell said: "The NS has been aware since last summer that the Audit Commission was only able to look at part of the picture regarding council publications. It is quite wrong that local authorities should compete directly with independent regional and local newspapers for advertising revenue in this way.

"The Commission's recommendation that councils review the value of their spending on communication with the public and ensure editorial policies are politically neutral and publicly defensible, must be implemented."

However, several London councils have hit back at publishers' claims, with Hackney Council pointed out that Trinity itself benefitted from the titles.

A spokeswoman told the Guardian: "In Hackney, we have an excellent working relationship with Trinity Mirror, who print our council paper and who put a huge amount of effort into pitching for the contract."

Trinity's Watford plant prints six of the nine London council titles, including Lambeth Life in south London. Trinity said that its issue was not with the titles themselves, but the "style, content and frequency" of the publications.