Powers designed to combat terrorism and serious crime have been used to catch dog owners whose pets fouled the streets and to investigate breaches of the smoking ban, according to a report.
Local councils have carried out more than 9,000 surveillance operations over a three-year period, campaign group Big Brother Watch said.
It said details obtained from 345 local authorities across the UK under the Freedom of Information Act showed they conducted operations under the Regulation of Investigatory Powers Act 2000 (Ripa) on 9,607 occasions between 2008 and 2011 - more than eight a day.
Among the cases highlighted in the report was Suffolk County Council, which was said to have used Ripa to make test purchases of a puppy, dating agency services and at a house of horrors.
Stockton Borough Council was said to have used Ripa powers for investigations into a fraudulent escort agency and the movement of pigs while councils used Ripa on 550 occasions to try to catch fly-tippers.
The report said that such cases showed the need for a comprehensive overhaul of the legislation.
"The legislative framework of surveillance does not offer proper safeguards against abuse or transparency," it said.
"It is absurd that the regulation of the test purchase of a puppy falls under the same legislation that governs when security services can intercept communications."
The Local Government Association (LGA) said that councils used Ripa "sparingly and responsibly" to combat crimes of public concern.
Mehboob Khan, chairman of the LGA's safer and stronger communities board, said that on average a local authority only used Ripa powers less than 10 times a year while council requests for communications data under the act made up only 0.3% of all requests received.
He said: "People quite rightly expect councils to tackle rogue traders, loan sharks and benefit fraudsters operating in their area.
"These criminals have been caught and prosecuted using evidence gained from surveillance. Without these powers it would be much harder, and in some cases impossible, to bring offenders to justice.
"Councils know how important it is that people can feel safe in the knowledge that these powers are used sparingly and responsibly.
"From November, councils will be the only public body that obtains approval from a magistrate each time they use surveillance powers."
However, the report said that the use of Ripa by local authorities was only "the tip of the iceberg", with a wide range of public authorities entitled to use surveillance powers under the act.
It said that in response to Freedom of Information requests made to 235 public authorities, 13 confirmed they had undertaken Ripa investigations, including the Scottish Environment Protection Agency and the Medicines and Healthcare Products Regulatory Agency.
Six - Ofsted, the Royal Mail, the Office of Fair Trading, the UK Border Agency, UK Trade and Investment and HM Prison Service - declined to say whether they used Ripa on the grounds that it could prejudice their law enforcement order functions.
The BBC confirmed that TV Licensing did use Ripa but declined to give further details - again so as not to prejudice law enforcement.
However, Local Government Secretary Eric Pickles said the public was entitled to know how such powers were being used.
"For public bodies, funded by and working for the taxpayer, to be using Ripa yet so vociferously trying to avoid accountability is simply unacceptable," he said in a foreword to the report.
"It is important that the public can have faith that surveillance powers are being used only in those situations where serious crimes are taking place and when there are no less intrusive alternative routes of investigation."
A TV Licensing spokesman said that the BBC only used Ripa in order to detect licence evaders.
"It is only used as a last resort once other enforcement methods have been exhausted. The reason we do not release more details on how and when it is used is to ensure people without a valid TV licence don't use this information to their advantage when attempting to avoid detection," the spokesman said.
A Home Office spokeswoman said: "We have already significantly strengthened the safeguards for using surveillance powers. From November local authorities will no longer be able to use covert surveillance for trivial offences and will need the approval of a magistrate before using any Ripa power.
"The use of Ripa is subject to oversight by independent commissioners and we will continue to work with them and organisations using Ripa to make clear it should only be used when necessary and proportionately."
Nick Pickles, director of Big Brother Watch, told the BBC Radio 4 Today programme: "When we started to dig into what local authorities were using these powers for, then we uncovered the cases and said 'that's not right'.
"Our concern is public authorities are not having to be transparent, they don't have to publish information about why they are using these powers and until we have that data, we can't be sure the same abuse is not going on.
"The law is a mess and we think rather than adding more legislation and more surveillance powers, and trying to tweak things, we need to stop and (have) a proper review of this after 10 years to work out what has gone wrong."