A fair parking crusader who has clawed back £1m in unfair fines for motorists claims an extraordinary oversight at Merton Council could pave the way for £10m in refunds.

Nigel Wise claims Merton Council failed to properly update a bylaw underpinning its right to charge motorists for using car parks, known as a traffic management order (TMO) – despite a warning by MPs six years ago.

Mr Wise, 59, was the driving force in getting Richmond Council to refund £1.1m to motorists after he challenged the legality of its mobile CCTV enforcement vehicles.

He discovered the “error” at Merton after taking on the case of Debbie King, who was fined by Merton Council after her valid parking ticket became unreadable when it curled up on her car window.

Mr Wise has raised the issue with the leader of Merton Council, Stephen Alambritis, and has called for an urgent investigation into the matter.

He said: “The council leader needs to launch an urgent review into this and suspend its off-street parking restrictions immediately; otherwise the cost to the public purse could be even greater.

“This is a serious situation that could impact on car parking charges going back several years and cost the council £10m in refunds – and that’s a conservative estimate.”

Mr Wise said Merton had not provided him with a TMO that complies with the 1984 Road Traffic Regulation Act, the law which underpins the council’s right to charge for off-street parking.

Instead, it has produced a TMO drawn up in 1979 under the 1967 Road Traffic Regulation Act, which was completely repealed in 2004 after the 1984 Act replaced it.

This means, he said, the council can not lawfully issue penalty charge notices (PCNs), or even charge motorists, for using their car parks across the borough.

Merton Council’s cabinet member for performance and implementation, Councillor Mark Betteridge, said: “The TMO we use fully complies with the requirements of current legislation.

“As is normal practice across local authorities, we use the original 1979 TMO which was amended in 1985 and further amended in 1995 to ensure the order is in accordance with current legislation.”

But three civil servants working in other London council’s parking departments have examined this case and concluded Merton should have revoked the 1979 TMO instead of continuing to amend it.

One said: “It does demonstrate though that Merton does not understand where their power comes from and makes them look incompetent.”

The Department of Transport issued guidance in 2008, which confirmed a council’s power to manage off-street parking is derived from the Road Traffic Regulation Act 1984.

It added: “Flawed orders... may be unenforceable and can damage both the aims of civil parking enforcement and the public perception of how it is managed.”

And an earlier report by MPs, on Parliament’s transport select committee, said councils needed a clear legal basis for their traffic management work, and the public “needs to be able to see and understand the rules in a simple and straightforward text”.

The 2006 report said: “Those local authorities who are guilty of this maladministration need to remedy the position without delay.”