The all or nothing rule was only introduced at the last minute after a proposal by Hartlepool's Labour leader, Councillor Jonathan Brash, at the behind closed doors meeting.

Opponents claim this is because Labour believed that Mr Mandelson – who stood down twice as a Cabinet minister while Hartlepool's MP – would be otherwise rejected.

The amendment was then only approved at the crucial meeting by the casting vote of Labour council chairman Coun Carl Richardson.

A second poll then saw all five freemen and two aldermen nominations approved.

The Labour group says it is "wholly inappropriate" to discuss the meeting in public while the council insists that "the proper democratic processes were followed".

UKIP councillor Steve Allison, however, has labelled Labour's proposal as "appalling".

He added: "My personal opinion is that the block vote was pushed through because the Labour Party knew Peter Mandelson would not have been approved on an individual basis.

"If I was one of the other nominees then I would feel slightly cheated as putting them together in one group devalues the honour."

The leader of the Hartlepool Conservative Party, Coun George Morris, added: "All of the Conservative councillors were against voting for the nominations in block, as we did not agree with it."

Liberal Democrat leader Coun Arthur Preece said: "The Liberal Democrat group voted against having a block vote and we were then put in a position to vote for people we didn't want in turn to get people we did want.

"I thought it was very unsatisfactory."

Coun Jonathan Brash said it was wrong for councillors to discuss the meeting.

He said: "It is wholly inappropriate for any elected member to comment on proceedings which were held in confidential session.

"The reason for it being held in private was to show respect to those individuals nominated and avoid causing any potential public embarrassment.

"For an elected member to break the code of conduct which they all sign up to is disrespectful to all of the people that were nominated for the highest civic honour we can bestow upon them."

The other approved freemen nominations are Sky Sports television presenter Jeff Stelling, Pansies breast cancer support group founder Isobel Wilson, Families First founder Wendy McLoughlin and Hartlepool Voluntary Development Agency project manager Peter Gowland.

The two prospective aldermen have not been revealed and all nominees will be asked if they want to accept their honour.

Mr Mandelson could not be contacted for comment.

A council spokesman said: "We are satisfied that the proper democratic processes were followed at the meeting."

The historic title of Honorary Freeman – which rewards outstanding service to Hartlepool – has only been awarded 14 times in town in the past 35 years.

Lord Mandelson, who is now the Government's business secretary, was MP for Hartlepool for 12 years and has the adopted title Baron of Hartlepool since returning to the Government via the House of Lords.