Shadow planning minister Keith Vaz claimed the Town and Country Planning (costs of inquiries etc) Bill would create a dangerous precedent of allowing retrospective legislation, and legitimise payments to government which were being demanded illegally.
Mr Vaz condemned the government for failing to consult councils over an error in law which it admitted was its own responsibility.
The bill, published just before Christmas, seeks to enable the government to charge councils for the costs of planning inquiries for their local development plans. In fact, the government has levied the charges for years without having the power to do so.
Proposals for retrospective legislation are rare and controversial, the most notable example being the debate over powers to prosecute alleged war criminals.
'This measure creates a very dangerous precedent. Retrospective legislation should only be used in very rare circumstances,' Mr Vaz said. 'For years the government has been collecting money from councils improperly. If councils had been acting illegally ministers would have hammered them.'