Community Secretary Eric Pickles has threatened to outlaw so-called 'town hall Pravdas' – local newspapers operated by local authorities which say damages the local press.
The Government unveiled new proposals aiming to clamp down on the publications in February 2011 when it revised the Code of Recommended Practice on Local Authority Publicity.
While most authorities accepted the recommendations, a handful – including several in London – ignored them.
But Pickles has now warned the rebel councils that the Government could introduce new laws banning the publications.
He told BBC London that such publications were a 'process of self-aggrandisement, self publicity", adding that it was 'not a public service, it's propaganda".
'What we will do is we will put it on a statutory footing and we will stop these town hall Pravdas,'said Pickles.
In recent years local newspapers in many parts of the UK have found themselves competing for advertising and readers with local authority-published titles, which in some cases come out monthly, fortnightly or even weekly.
The new rules outlined last year stated that only parish councils could produce monthly magazines, with other councils limited to quarterly frequency.
In September council newspaper the Greenwich Time was reported to the District Auditor amid claims it breached Government guidelines on local authority publications.
It comes after the council approved plans on 30 August to continue publishing Greenwich Time, a weekly paper which comes out 48 times a year.
Tower Hamlets Council also continued to publish a weekly paper called East London Life.
Spokesman Takki Sulaiman defended the title, saying: 'Local authorities have a duty to promote community cohesion, race equality and reduce fear of crime and promote a healthy lifestyle."