The investigation into their activities on the council at Canvey Island, Essex, began after complaints that they had given a fellow lodge member the go-ahead to build a leisure complex.
The ombudsman's report, which is due to be published next week, says eight members of the 16-strong committee were Freemasons and a ninth was married to a Freemason. Three of them were found guilty of maladministration.
The investigation into the Castle Point Borough Council, the Essex local authority which is responsible for Canvey Island, provides an unprecendented insight into the close relationships within a small town. According to the ombudsman's report, the links between the then ruling Tory administration and freemasonry were "extensive".
The complaints which prompted the ombudsman's investigations were made by two Canvey Island residents who said that councillors had failed to declare private or personal interests - particularly masonic links - while they dealt with consecutive planning applications for a leisure complex between 1991 and 1994.
They claimed that proper consideration of the development, which now overlooked their homes and had caused a drop in values, had been prejudiced.
Under the terms of the National Code of Local Government Conduct which councillors sign, members have to disclose significant personal interests in any matters and withdraw from a meeting where such an issue is discussed. According to the code, such interests include "associations with clubs, societies, and other organisation such as Freemasons".
The ombudsman says in his report: "Some members had little or no regard for the code they had undertaken to observe, in circumstances which could only fuel suspicion and mistrust of the way in which the council went about its business. "Freemasonry is generally viewed with suspicion among non-Masons not least because of the secrecy attached to the `craft' ... in my view, knowing that a councillor and a planning applicant are Freemasons and members of the same lodge, members of the public could reasonably think that such a private and exclusive relationship might influence the member when he came to consider the planning application."
The ombudsman's inquiries showed that eight members of the planning committee were Feemasons and one other was a mason's wife. Between 1991 and 1994 they dealt with three planning applications; the first was made by a member of the same masonic lodge as five councillors, while the next was made by another member of the same lodge and his business partner.
He in turn had let his home be used for fund-raising events for the Conservative ward of one of the other councillors.
As the investigations continued, other connections were discovered. Another councillor, who was not a Freemason, had a partner who was employed by one of the applicants.
One councillor, while a Freemason, said he did not belong to the same lodges as the applicants, but he had worked for one of them as a toastmaster.
The three planning committee members who were named in the report as guilty of maladministration - councillors Sharp, Sweeting and Wood - were singled out by the ombudsman because they failed to declare interests.
Bill Sharp had lived next door to one of the applicants, and had bought the land on which his house stood from another. Mr Sharp said that he would consider all three applicants to be friends as he would another 200 people in the area.
A second named councillor, Mrs Wood, was married to a Freemason who was also a councillor (but not a member of the planning commitee). She had attended lodge functions with her husband where she had met two of the applicants. The third named councillor, Mr Sweeting, was a Freemason for 25 years and in the same lodge as two applicants.
Since the ombudsman's investigation was completed, all three named councillors have left the council.
Yesterday Mr Sharp said: "I'm perfectly happy with my own integrity." Mr Sweeting commented: "The situation is awkward in a place like Canvey Island. Everyone knows everybody else and as I was a councillor for a very long time, people got to know me."