An investigation has been launched at Oxford Town Hall after a porter was found using a private computer for councillors.
The Independent Working Class Association (IWCA) is refusing to use its office fearing they could be spied on by political rivals.
IWCA city councillor Claire Kent discovered the porter using the computer without permission on June 16. Oxford City Council launched an investigation immediately.
Now the IWCA, which has three councillors in Blackbird Leys and Wood Farm, is searching for new premises.
Ms Kent said: "It's a breach of security by somebody who is supposed to be looking after our security. We don't feel secure in our office any more.
"We understand the Labour Party allow staff to use their computers but we don't."
The IWCA is now looking to set up offices in Blackbird Leys or allowing councillors to work from home.
But leader of the council and Labour city councillor Alex Hollingsworth has dismissed the fears.
He said "A member of council staff used a computer two doors down very briefly.
"What could be wrong with that?
"Now it's suddenly being made out like Watergate Mark Two."
Deputy Labour group leader Bill Baker said he had now stopped staff using private computers.
He said: "I don't think it's appropriate because we can leave confidential papers about."
A city council spokesman said staff had been interviewed but no disciplinary action would be taken.
"We have offered to put in a quick solution to deal with the IWCA but unfortunately we are unable to offer them accommodation," he said.
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