Fareham Borough Council has used anti-terror laws more than 200 times to spy on people and catch them committing minor offences.
The authority came fourth highest for the number of times it has used the powers in a national poll.
The council admitted using the Regulation of Investigatory Powers Act 240 times in the last five years to tackle anti-social behaviour and other minor crime.
Across the country the powers have been used 10,000 times in the past five years, according to figures released to the Liberal Democrats under the Freedom of Information Act.
The party is demanding stricter rules on when the act can be used.
Julia Goldsworthy, Shadow Communities and Local Government Secretary, said: ‘When RIPA was passed, only nine organisations, including the police and security services, were allowed to use it.
‘Now a total of 795 bodies, including all 475 local authorities, can use powers that were originally designed to prevent terrorism.
‘Unless RIPA is reformed it risks becoming a snoopers’ charter. Surveillance powers should only be used to investigate serious crimes and must require a magistrate’s warrant.’
Fareham council leader Sean Woodward said: ‘Only senior managers can authorise the use of the laws.
‘We have zero tolerance to benefit fraud, which accounts for the vast majority of times we have used it.
‘I don’t think anyone would say benefit fraud is not a serious crime.’
Gosport Borough Council revealed it had used the act, which was designed to tackle terror suspects and serious crime,nine times to catch dog foulers, flytippers, noisy neighbours – and to crackdown on the illegal sale of shell fish.
Portsmouth has used the act 22 times, while East Hampshire has used it 34 times.
Figures are not available for Havant, Hampshire and West Sussex.