The Leader of Barking and Dagenham Council complained to the Business Secretary in a letter last week after the council said it was told by an official at the Department of Business, Energy & Industrial Strategy (BEIS) to stop taking action against local shops that were failing to enforce mask-wearing.
The council served notices to high street retailers after enforcement officers visited the stores and witnessed high numbers of people not wearing face coverings.
According to Barking and Dagenham, the council was later contacted by an official from BEIS who asked the council to "refrain from taking any further action against Lidl, B&M, Sainsbury's and Morrisons supermarket operations in Barking & Dagenham town centre".
But BEIS insisted that the department contacted the London Borough of Barking & Dagenham to "understand their position" and offer its "support to help resolve this matter".
In his letter, Councillor Darren Rodwell said the official "wanted [Barking and Dagenham] to know [that the council] did not have powers to enforce these guidelines using the government's Covid-19 emergency powers and that our action had caused a negative reaction from the operators".
He added: "I am disappointed to hear this, however I would point out the council issued Community Protection Warning notices under the Anti Social Behaviour Crime and Policing Act 2014. A warning notice is a first step before the council will consider issuing a Community Protection Notice. When my officers became aware major high street retailers were not complying with the government's latest guidelines we looked to remedy this by using powers already available to us."
According to Cllr Rodwell, under the 2014 Act the council has a duty to act to protect the quality of life for its residents. In this case, he said that the lack of mask-wearing was "increasing the risk of the spread of Covid-19 due to what appears to be a 'lassaiz-faire' no challenge policy by those operating stores".
Cllr Rodwell's letter went on to claim that the government is "taking the side of business interests over the health of [the council's] residents" and in so doing, it was ignoring its own advice.
Attention was also drawn to an email that Barking and Dagenham had received from the Cabinet Office in September which commended the council on its work in communicating key messages to its residents.
Barking and Dagenham also expressed disappointment that Fixed Penalty Notices can only be issued by the Police.
In a statement, Cllr Rodwell added: "It is important to put people before profit. A government official contacted us and asked us to back off from this enforcement. There are complaints from supermarkets that we were being too heavy handed, but I believe we were doing the right thing."
A Government spokesperson said: "People must wear a face covering by law in shops and supermarkets in England. They can be fined if they do not.
"Shops and supermarkets are required by law to inform customers to wear a face covering, unless they have an exemption, through signs or when they enter the premises. This is enforced by local authorities and businesses risk facing a fine if they fail to do so. If customers refuse, the business can escalate to the police if needed."