The Electoral Commission has rejected calls for tougher restrictions on postal voting – despite concern that the ease with which postal votes can be obtained contributed to a major election fraud scandal in Birmingham.

In a long-awaited report, the voting watchdog named Birmingham, Coventry and Walsall as fraud hotspots where police, the local authority and political parties must work together to stamp out election cheating.

It demanded new laws to ensure voters have to provide identification when they turn up at polling stations.

But it ruled out making it harder for people to vote by post.

Deputy High Court judge Richard Mawrey compared Birmingham to “a banana republic” in 2005, when he found there had been a Birmingham-wide campaign by parts of the local Labour Party to use bogus postal votes to counter the adverse impact of the Iraq war on the party’s support.

Postmen were intimidated into handing over sacks full of postal votes, ballot papers were changed once votes had been cast, using correction fluid, and police discovered six men in a warehouse with 274 unsealed postal votes.

The scandal led to a change to the rules coming into effect in June, to ensure voters have to fill in registration forms themselves rather than one person filling in the form for an entire household.

It also helped prompt the Electoral Commission report, which said postal voting should not be restricted because it would make it harder for “the overwhelming majority of electors who find postal voting a convenient and secure method of voting” to take part in elections.

Instead, party campaigners should be banned from helping voters fill in postal votes, or from offering to take the completed forms away to post them, the Electoral Commission said. The report named 16 local authority areas including Birmingham, Walsall and Coventry “where there appears to be a greater risk of cases of alleged electoral fraud being reported”.

Council officials overseeing elections, police and political parties in these towns and cities should work together to identify any cases of suspected fraud, the watchdog said.

It said: “We have heard some strongly held views, based in particular on reported first-hand experience by some campaigners and elected representatives, that electoral fraud is more likely to be committed by or in support of candidates standing for election in areas which are largely or predominately populated by some South Asian communities, specifically those with roots in parts of Pakistan or Bangladesh”.

But it added: “Evidence from police data and prosecutions shows that people accused of electoral fraud and people convicted of fraud come from a range of backgrounds including white British, South Asian and other European backgrounds.

“It would be a mistake to suggest that electoral fraud only takes place within specific South Asian communities.”

Jenny Watson, Chair of the Electoral Commission, said: “As we look to the next General Election, there needs to be a change in campaigner behaviour in order to help rebuild trust in the system.

“Campaigners must no longer handle postal votes, or postal vote applications under any circumstances. We should be able to achieve this through a strengthened Code of Conduct. But if we cannot, we will recommend that the law is changed.

“Looking ahead, the time has come for England, Scotland and Wales to move towards a requirement for voters to produce ID at polling stations. This would strengthen the system and bring Great Britain into line with Northern Ireland and many countries where this is already in place.”

Birmingham MP John Hemming (Lib Dem Yardley), who helped expose the voting fraud condemned by Judge Mawrey, said: “This is a major step forward. ‘Personation’ is a real problem and we have the example of Northern Ireland which shows requiring identification doesn’t stop people voting.”

But he said he continued to have concerns about postal voting.

“The issue isn’t so much fraud as that people are not voting in private, and might have someone looking over their shoulder. There are cases of intimidation.”