A political row erupted on Thursday after MPs suggested that increasing town hall allowances could help attract more "capable" local councillors.
Conservative Party chairman Grant Shapps accused Labour of a "sleazy" bid to boost its own party coffers by encouraging higher payments.
But the Opposition said he had scored a "massive own-goal" because Tory MPs had approved the contents of the cross-party report.
The tit-for-tat was sparked by the conclusions of an investigation into the role of councillors by the Communities and Local Government Select Committee.
It found that present levels of allowances "at best, do not encourage and, at worst, deter capable people from standing for election".
The increasingly demanding role warranted "an appropriate level of compensation, especially if they have to take time off work", it said.
However "the problem is exacerbated because councils are reluctant to vote for an increase for fear of the media and public reaction".
Instead, like under the new system for MPs' pay and perks, responsibility for setting allowances should be handed over to an independent local panel, it recommended.
Compensation for loss of earnings, incentives for employers to support council duties and more officer support to handle casework were also recommended.
Labour MP Clive Betts, who chairs the committee which has a majority of members from coalition parties, said "legitimate" rises were being shied away from and dismissed Mr Shapps' attack as "shallow political point-scoring".
Minutes show that the text of the report was approved by both of the Conservative members who were present: Heather Wheeler and Mark Pawsey.
Mrs Wheeler, herself a councillor of more than 20 years' standing, said she stood by the report, including the concerns that low allowances may in some cases put off candidates.
But Mr Shapps accused Mr Betts of a "cynical and sleazy move" because Labour councillors are obliged to pass on a proportion of their allowances to the local and national party coffers.
"Local taxpayers will be shocked to learn that the Labour Party will be quids-in from Labour demands for more taxpayers' money on councillor allowances," he said.
Mr Betts insisted the committee was not calling for a "blanket increase" but an independent assessment in each area as to whether allowances were set at the correct level.
"We found in our inquiry that political parties are achieving - and will achieve - much more when they work together to get a wider range of people to stand for election," he said.
"We also found that people are put off by shallow political point scoring, which makes the response of Mr Lewis and Mr Shapps all the more disappointing" said Clive Betts.
A Labour Party spokesman said: "This is a massive own-goal from Grant Shapps.
"The proposal is not Labour Party policy, it is a recommendation by a cross-party committee with a government majority that councils ask an independent body to set councillor allowances in future.
"Unless he is instructing all Tory councils and Tory councillors not to take an increase in allowances, then his words are just meaningless posturing."
Mrs Wheeler, the South Derbyshire MP who was previously leader of the local council. said: "I stand by the recommendations of the committee."
But it did not mean all allowances should be raised, she insisted.
An independent panel in her local authority area had actually recommended a reduction in allowances which had been voted through by councillors, she noted.