Local authorities are only allowed to usea cameras authorised by the Vehicle Certification Agency (VCA).
But a Newham Council internal report, obtained by the BBC, shows between 2011 and 2013 it issued 6,840 tickets from unauthorised cameras – making £350,000.
The council says previous cases show it does not need to repay drivers.
By law, only camera models that have been specifically authorised by the VCA can be used by councils.
Otherwise authorities might use cameras that are not of a high enough calibre to be relied upon for evidence.
But Newham Council was using cameras that did not have approval.
When the problem came to light in February 2013, it commissioned accountancy firm PricewaterhouseCoopers to carry out an audit of how many unlawful tickets it had issued.
BBC London has now obtained a final copy of that report, which covers tickets issued in the years 2011-2012 and 2012-2013.
It reads: “Compliance is high (97%); however, due to the volume of parking penalty charge notices issued even a small percentage of non-compliance will have a significant impact on the council’s finances.
“Clear instructions should be issued to the parking contractor only to use certified cameras for the identification of parking offences.”
With regard to two of the unauthorised cameras, the report detailed: “The parking contractor was instructed not to use these cameras to identify offences. However, 151 PCNs were issued.”
The audit recommended the council improves the accuracy of its camera register and monitoring of the private companies it uses to enforce parking.
The council has now cancelled all the parking tickets that were unpaid, writing off a total of £347,376.
But it is refusing to refund those drivers who settled the unlawful fines straight away.
Paul Pearson, of ticket appeal website Penalty Charge Notice, said: “If the cameras are uncertified they can’t be used for enforcement – that’s the law.
“The law is there to make sure cameras councils use are fit for purpose. They are relied on for evidence, otherwise councils could use any old camera.
“They should contact the motorists who’ve paid their fines, apologise and offer a refund.
“They expect us to abide by the rules, but when they’re caught they seem to be above the law.
“It’s disgraceful conduct.”
The BBC has also learned some tickets were unlawfully issued before the two-year period covered by the report, but the authority is unable to say how many.
Laura Macowski, who lives in Newham, believes she may have been issued with one of the illegal tickets.
She told the BBC: “I paid a fine issued via a camera on the Romford Road about six months ago which I believe was unlawful. I have absolutely no idea why I got the ticket.
“I’ve lived in Newham since September 2012 and received a ridiculous amount of PCNs.
“I haven’t taken any of my appeals further as I just didn’t have time to go through the long process.”
In light of the BBC’s investigation, Local Transport Minister Norman Baker said: “When councils are carrying out parking enforcement using cameras they must make sure they are only using equipment which has been properly certified.
“This certification process is vital in ensuring that the system is fair and that motorists can have confidence in the standard of evidence being used to issue penalties.”
A Newham Council spokesman said: “An internal review in June 2013 of 169 cameras operated by Newham Council found that 12 cameras used to issue parking tickets were not fully certified at that time.
“The council has decided that all outstanding fines from tickets issued via these cameras will be cancelled.”
He added: “The cameras recorded vehicle use which was liable for enforcement.
“As other councils have established in law when involved in similar cases on a much larger scale, we will therefore not be allowing appeals on tickets paid in relation to these cameras.”