Waltham Forest council is set to challenge the government over restrictions on the publication of its fortnightly freesheet.
The council's chief executive, Martin Esom, received a formal letter from Eric Pickles, Secretary of State for Communities and Local Government, on Thursday calling for compliance of the Publicity Code under the new Local Audit and Accountability Act.
Under the act introduced on March 30, editions of Waltham Forest News (WFN) must be limited from 26 to just four a year, and must be 'even-handed', both of which the council is alleged to have breached.
However, the council has said it will explain its actions for breaching the law, and provide 'strong reasons' for why WFN should continue being published every two week at an annual tax-payer funded cost of £500,000.
A spokeswoman said: "The letter received on April 16 from the Department for Communities and Local Government states that the Secretary of State proposes to direct the council to comply with the Recommended Code of Practice on Local Authority Publicity but without saying how we don't comply.
"The letter invites us to make written representations to the DCLG within the next 14 days. We always have regard to the Code of Practice when publishing Waltham Forest News and believe we currently comply with the Code in every way, except frequency of publication.
"We believe we have strong reasons to publish fortnightly and that it is entirely lawful to take this approach.
"Fortnightly publication allows for regular and effective communication of council and community services, statutory notices and consultations to 97,000 homes and provides value for money for residents as we do not have to pay £100,000s per year for external adverts in printed newspapers which have declining circulations.
"We will be making representations to the minister not to make the proposed statutory direction."
The Ongar MP has described the free sheet and four others across London as "propaganda on the rates", "Town Hall Pravda" and an unnecessary waste of taxpayers' money.
Mr Pickles has said he will listen to what the council has to say before making an informed decision on the future of WFN, but if councils fail to comply with the direction, there will be legal consequences.