The Munxar council has been instructed to revoke a decision made in March last year to award a contract to a contractor who had a councillor as one of his sub-contractors.
Before awarding the contract, the council had sought the advice of the Department of Local Government.
In a statement this afternoon, the Parliamentary Secretary responsible for councils. Jose Herrera said he believed that the advice the council had been given went against the spirit of the law.
He asked the director of Local Government to immediately and in the interest of greater accountability should publish guidelines for councils to follow.
He also said that amendments would be moved since the law currently allowed for different interpretations. The amendments, he said, would be enacted by September.
Earlier this week, St Paul's Bay local council was instructed to revoke a decision where a works supervisor contract was awarded to a member of the council.