Councils used anti-terror laws to launch almost 10,000 spying missions last year to investigate alleged minor offences by citizens.
The councils used the Regulation of Investigatory Powers Act (Ripa) to enable them to request the e-mail and phone records of citizens.
It was reported earlier this year that councils were using Ripa to investigate those involved in alleged dog fouling, under-age smoking, and fly-tipping offences. The councils have also used Ripa to check that claimants aren't wrongly claiming benefits.
Chief surveillance commissioner Sir Christopher Rose has now outlined the extent of council surveillance in his annual report, which says councils have used Ripa almost 10,000 times to help with spying missions on their citizens.
Rose said some councils were were guilty of using Ripa in a "disproportionate" way.
Ripa was originally brought in to help the police and the security services tackle serious crime and fight terrorism. However, in recent years, nearly 800 public bodies have been added to the list of organisations allowed to use the Act to carry out covert surveillance and intercept communications.
In his annual report, Rose said that 9,535 "directed surveillance authorisations" were granted to public bodies in the 12 months to 31 March. This equates to almost 30 a day.
Rose accused councils of "a serious misunderstanding of the concept of proportionality". He threatened to strip them of their powers.
Rose said, "Many authorities do not recognise that they are vulnerable to criticism. If authorities wish to retain the protection that Ripa affords, I encourage a greater attention to detail."
The government now says it will "review" the powers that public bodies have under Ripa.