Former Tory mayor Chris Morgan was last night accused of still pulling the strings at a North town hall two years after stepping down from his post.
Labour councillors in North Tyneside say Mr Morgan, who stood down to clear his name of child pornography allegations, was given access to financial information before elected members to "spin" a press statement on the Conservatives' budget.
They raised concerns over whether Mr Morgan, who has no formal role with the authority, was the driving force behind its spending plans.
Mr Morgan quit as elected mayor in April 2003 after he was arrested over allegations of child pornography.
Last September, he was cleared of all charges at Hull Crown Court and returned to politics as campaign manager for his successor as mayor, Linda Arkley, and for Tynemouth General Election candidate Michael McIntyre.
But after a press statement he sent out last week, Labour councillors said it was "scandalous" he had access to the authority's financial details.
The statement contained details of the borough's proposed council tax rise and spending plans for departments, due to be considered by the council on Thursday.
Labour leader John Harrison said: "We believe he has access to sensitive budget information before elected members.
"We believe that it is inappropriate for an unelected volunteer to be privy to sensitive information prior to the formal setting of the budget.
"People will be rightly asking whose budget this is. However much the mayor relies on Chris Morgan, she must accept that he is no longer elected or even on the payroll of the council and that it is scandalous that he is in receipt of important financial information before elected members. It's like allowing somebody to walk in off the street and set the budget for the council."
But Mrs Arkley insisted she is in charge of the council.
She said: "The Labour Party are fully aware whose budget this is.
"It's mine and the cabinet's and we have worked closely with officers to ensure that it delivers on our key priorities, particularly value for money for our residents.
"There is no question and there never has been any question of outside interference and whilst my campaign manager handles the Conservative Party's press work in North Tyneside, it does not and never has entitled him to information other than what is in the public domain."
"What Coun Harrison and his colleagues are trying to draw attention away from is their failure in office to set a deliverable budget for the people of North Tyneside and their failure in opposition to re-connect with residents across the borough."
Mr Morgan said: "I have had no involvement in the council's budget and I've not been privy to any confidential information in connection with the council's budget."
