Jerry White, the local government ombudsman, referred in a report to two Labour councillors - man and wife - who were jailed in 1995 on charges connected with two cases of maladministration.
A Labour spokesman said last night that as soon as the matter had come to the attention of the party, the pair had been "chopped off at the knees, and told goodbye".
Two complaints were made to the ombudsman about the way in which the council had handled planning applications. Mr White has urged the council to compensate the claimants for any reduction in the value of their homes resulting from improper developments.
The ombudsman's office said: "The ombudsman found maladministration by the council for the failure of former Councillor John Dalgarno and former Councillor Sally Dalgarno to declare their interest. The interest arose through Mr Dalgarno's dealings with the site developer and through a corrupt arrangement to secure planning permission for projects for that same developer."
He also found that the way in which party discipline had been used to decide planning applications amounted to maladministration.
Mr Dalgarno was the chief whip at the time of the decision which was the subject of the complaint. Mr White said: "In these cases, the abuse of the party discipline put the whole Labour majority group and the city's planning system into the hands of the councillors Dalgarno and the developer."
Police were called after complaints by Labour and Tory councillors to the chief planning officer in 1991. The two councillors and the developer were found guilty in June 1995.
Mrs Dalgarno was convicted of receiving the construction of a conservatory from the developer, named as "Mr Sherbourne", as an inducement for supporting planning applications. Mr Dalgarno was found guilty on the same count, along with charges of receiving a Ford Orion from another defendant, and of receiving pounds 3,500 for backing planning applications.
Mr White's report said that because councillors should decide planning applications on the facts, it was inappropriate to impose party discipline on the planning process.
The former councillor John Dalgarno is not John Dalgarno, managing director of Tarmac Contract Housing.Reuse content