Councils issuing workers with motoring perks have wasted millions of pounds, ministers claim.
Research showing that employees driving their own car for work were paid up to 65p a mile last year triggered the criticism.
The TaxPayers' Alliance found that Lancashire, Derbyshire, Cornwall and Warwickshire local authorities all offered employees the top mileage.
The news comes as most motorists are faced with soaring prices at the pumps, as well ascar insurance and other costs.
The average rate across the UK was 56.4p in 2010-11 which was well above the 40p HM Revenue & Customs-approved level at the time. That meant the typical council worker would have ended up £164 better off for every 1,000 miles driven.
The study found that local authorities paid staff a total of £427 million in mileage allowances in 2009-10, which was up from £402 million in 2008-09.
"Ordinary motorists who are feeling the pinch will be shocked that council staff are getting such a generous deal for their mileage claims and it simply isn't fair," said TPA director Matthew Sinclair.
Local government minister Bob Neill said: "Town halls are wasting millions of pounds of taxpayers' money by these preferential and privileged motoring perks.
"Every bit of the public sector needs to do their bit to pay off the budget deficit. Simple changes like clamping down on these subsidises will help councils drive down unnecessary costs and protect frontline services."
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