About 8,000 copies of a Birmingham City Council CD have been sent out to members of the UK music industry, despite copyright mistakes.
The B1 - Birmingham's Best New Bands CD was distributed free with this week's edition of industry magazine Music Week.
The city council said it did not contact Music Week because it discovered the problem too close to the magazine's publishing deadline. It said it was consulting a media lawyer to ensure any future copies carried the correct labelling.
Music Week said it was "disappointed" the council had given no warning that the CD - published as an insert this week - had a labelling problem.
The cover was also littered with inaccuracies - with the copyright of some tracks attributed to the wrong people and some misspellings - and breached the council's own contract.
Debra Davis, the council's director of communications and manager of the B1 project, said: "If someone had raised this issue with me two weeks ago, perhaps we could have done something about it. But by the time we realised, it was too late."
Band manager John Mostyn said the authority should "count itself lucky" that the artists involved were unlikely to take legal action over copyright and contractual errors.
The project attracted fierce criticism after the council allowed fee downloads of tracks on its website without permission.
It has also paid about #12,000 to distribute 8,000 copies of the CD with industry magazine, Music Week, despite copyright labelling problems with the discs.
Mr Mostyn, who has managed acts such as Fine Young Cannibals and Ocean Colour Scene as well as advising the recording company of Lizzy Parks, an artist on the B1 CD - said: "This whole thing has been embarrassing. It's embarrassing for Birmingham and for the city's music industry.
"If this was North America, it would be in court by now."
Debate about the CD has been raging on local websites such as arts blog Created in Birmingham and The Stirrer, the site run by ex-BBC WM presenter Adrian Goldberg.
But Ms Davis said it was now time to 'move on'.
She said: "I certainly wish these mistakes hadn't happened, but I believe the CD is a first-rate product. The gossip that is going on is not productive to the music scene in Birmingham. We must move on."
She said the council was seeking legal advice and would correct any label errors. It also planned to put the tracks back online legally. But there would be no inquiry into the original errors.
Ms Davis said: "People may say I have made bad decisions, but we all make mistakes. The CD is still essentially the right thing to do at the right time and I will make sure these issues are resolved."
Matthew Tyrrell, business development manager for Music Week, said he was "very concerned" about the errors.
He said: "The responsibility for any of the misprints in the Music Week insert lies with Birmingham City Council. But we are very concerned they did not come to us to tell us there was a problem."