Businesses accused of abusing parking permits will not have them taken away after they were “handed out like confetti” by the council to private schools and estate agents.

A report by the head of Merton Council’s parking services, Paul Walshe, said it would be “damaging to businesses” to take away the extra permits, even though the council’s own rules state a business can only be given a maximum of two unless considered essential.

It was revealed in July 2012 six businesses near Wimbledon town centre and the Village had more than two, including a private school, a software solutions company, and four estate agents.

The Study Preparatory School was found to have 27 permits.

In the report, due to be considered by the cabinet next week, Mr Walshe said: “Rather than simply rescinding the permits, which would prove damaging to those businesses that hold them, Parking Services has contacted the permit holders to inform them only two of their permits may be used on-street.

"The rest of the permits will only be valid in the nearby Queens Road car park, which is currently under-used.”

Mr Walshe said parking wardens have been used to monitor the use of permits and that the council had written to businesses to remind them that only two permits are valid on the street at any one time.

Councillor for Hillside ward Suzanne Evans discovered the information.

She said: “It was shocking to discover on-street business permits were being handed out like confetti, meaning residents were struggling to park their cars, so I’m obviously very pleased the two permit rule is going to be enforced.

“I’m also pleased this concession has been made for businesses.

"The Labour council is refusing to reduce business rates for hard-pressed business rates in these difficult times – despite being given new powers by the Conservative-led Government to do so – and they need all the help they can get.”