The Newspaper Society has written to the government to highlight concerns about council publications competing with the local press for advertising revenue and readers.

In a letter to the Minister for Local Government Rosie Winterton the Newspaper Society, which represents the interests of the local press in the UK, said local council newspapers cause “real damage” to the commercial regional media.

The letter also points to worries about the government withdrawing its advertising from local media and current proposals to remove the requirement for statutory notices to be published in local newspapers.

Lynne Anderson of the Newspaper Society said: “We note your recent comments about the important role local councils can play in helping their local businesses to prosper.”

“Unfortunately, an increasing number of local councils across the UK are actively competing with local newspapers for readers and advertising revenues, causing real damage to these local businesses at a time when they are meant to be helping them to come through the recession.

“As well as being recognised as important local businesses and employers, local newspapers are of course vital to the functioning of any healthy local democracy, scrutinising the effective operation of local authorities, examining how council taxpayers’ money is spent, and holding elected representatives to account.”

Her letter to Ms Winterton quotes a passage from Digital Britain which acknowledges that if council newspapers operate in a way that makes local media unviable they would be “against the public interest” and invites the Audit Commission to undertake an inquiry into the practice.

In Birmingham, the future of the city council’s Forward newspaper is uncertain after its last edition appeared in June.

City leaders are deciding whether to make the suspension permanent or reduce publication and distribution.

Almost 400,000 editions of the free paper, formerly called The Voice, were delivered to homes, community centres and libraries every fortnight at a total cost of about £600,000 a year.

Council publications were initially set up as a vehicle for council job vacancy and public notice announcements, and thought much cheaper than paying to advertise in commercial newspapers.

But critics have slammed them as propaganda pamphlets. Government Culture Secretary Ben Bradshaw recently compared the local authority free-sheets to the former Russian Soviet state newspaper Pravda and asked why taxpayers’ money was wasted in this way.