Town halls have boosted their annual profits from parking fines and charges to more than £560 million, up by 10 per cent in a year, according to figures compiled by the RAC Foundation.
Parking charges are providing huge cash surpluses for some councils with the 359 town halls across England having a total current account surplus of £565m from parking schemes in 2011-12.
This is a £54 million increase on the £511 million surplus in 2010/11, said the foundation.
Of the ten biggest surpluses eight were in London councils with Westminster heading the top of the list with a £41.6m profit before spending on road infrastructure was taken into account.
Second, with a surplus of £28.1m was Kensington and Chelsea with Camden in third place with £25m. Only Brighton and Hove and Cornwall councils broke into a top 10 dominated by London authorities.
The figures also showed that just 52 (14%) of the 359 councils reported a deficit on their parking operations in 2011/12.
The news of the huge surpluses follows an announcement last week by Local Government Secretary Eric Pickles in which he suggested that shoppers could be given a 'grace period' of free parking on double yellow lines for 15 minutes.
Councils have, however, warned that this would be impractical.
The surplus figures come just days after a judge declared that Barnet Council in north London had acted illegally in setting parking charges to raise revenue.
RAC Foundation director Professor Stephen Glaister said: "For many local authorities, parking charges are a nice little earner, especially in London.
"Not all authorities make big sums. Several run a current account deficit and indeed of those with surpluses many will see the money vanish when capital expenditure is taken into account.
"But the bottom line is that hundreds of millions of pounds are being contributed annually to council coffers through parking charges ."
Local Government Secretary Eric Pickles said the figures showed why "we need to review and rein in unfair town hall parking rules" and warned that parking profits are on track to reach £635million in 2013-14.
Mr Pickles said: "This Government has scrapped the last administration's Whitehall rules which told councils to hike up parking charges and adopt aggressive parking enforcement. But councils aren't listening, and local shops and hard-working families are suffering as a result.
The law is clear that parking is not a tax or cash cow for town hall officers."
However, Councillor Daniel Astaire, Westminster City Council cabinet member for business, defended the money made from parking charges saying: "The system is already changing and councils are already looking to work with motorists to issue fewer fines and crucially increase the amount of people parking correctly.
"Parking is about traffic management, tackling congestion and trying to implement positive benefits for businesses and high streets.
"If we stay in this Jurassic Age of pure rhetoric about cash cows and money making, innovation will be stifled and we cannot engage with motorists properly in order to find the best solutions that will benefit everyone."
These were the councils with the largest surpluses (before capital charges) in 2011/12
1. Westminster £41.6 million
2. Kensington & Chelsea £28.1 million
3. Camden (north London) £25.0 million
4. Hammersmith and Fulham (west London) £19.5 million
5. Wandsworth (south west London) £16.1 million
6. Brighton and Hove £14.4 million
7. Islington (north London) £10.9 million
8. Cornwall £7.9 million
9. Newham (east London) £7.3 million
10. Hounslow (west London) £7.3 million