Under legislation brought in eight years ago to help thwart terrorists, local authorities can access phone and e-mail records and use surveillance to detect or stop criminal offences.

Since the beginning of last year, South Tyneside Council has been using covert surveillance to investigate 11 people over allegations of benefit fraud and licensing and trading standards offences.

Two of the 11 investigations under the 2000 Regulation of Investigatory Powers Act (RIPA) have led to prosecutions. One resulted in a formal caution.

Four other investigations are ongoing, but four have been curtailed, with no further action to be taken.

The council's confirmation that it is using the act comes after several other local authorities in England were criticised by the Local Government Association for their overzealous application of the laws.

Councils – along with jobcentres and school inspectors – have been allowed to use the powers since then Home Secretary David Blunkett extended the scope of the act in 2003.

Recent examples include a family in Dorset being followed for weeks to check if they lived in a school's catchment area.

Others have seen council workers rooting through people's rubbish to see whether a crime had been committed.

The powers have even been used to investigate dog fouling.

South Tyneside's trading standards officers say such methods are only used to investigate serious offences in South Tyneside, such as benefit fraud or alcohol sales to underage customers.

Due to the nature of his work, the investigation team member asked to remain anonymous.

He said: "There has been a lot of criticism of authorities around the country for using the powers for what we believe are minor offences, but in South Tyneside, we only use the powers for crimes we see as serious and when we consider them necessary.

"We certainly don't use them for dog fouling, which some authorities have been doing.

"As well as benefit fraud, we use the powers to investigate underage sales of alcohol and the illegal selling of cigarettes."

A council spokesman added: "Our policies explain clearly the principles of proportionality and necessity that officers must apply when seeking and granting authorisations.

"A limited number of council officers have been authorised to grant RIPA authorisations, and they have undergone comprehensive training."

Civil rights group Liberty wants the Government to reform the law, however, so that only judges, rather than town hall officials, can authorise use of the more intrusive powers sanctioned by the act.

Liberty director Shami Chakrabarti said: "This is about using quite serious powers that are meant for crime, not minor matters."