Local Government Minister Gail Gago said before a formal investigation could begin, the council was required by law to respond to allegations in the initial inquiry.

The council will have a fortnight to respond to that report, which is based on information and interviews with council members and staff. Ms Gago said no allegations of corruption were found by the preliminary report.

Ms Gago said the first report would not be publicly released until council responded, because it contained unproven information.

Thirty ratepayers were ejected from a controversial council meeting earlier this week, at which the council called for an investigation into one councillor. But Ms Gago said all of the council’s possible breaches of the act would be investigated.

“I’m aware that there was a resolution passed calling on me to investigate a particular councillor and I think it’s a decision that smacks of panic,” Ms Gago said.

Councillor and former mayor Jim Jacobsen, who left the room in protest when the public was ejected, claims he is the subject of the suggested investigation and said the council was scapegoating him. Public outcry followed council’s handling of the Chelsea cinema and other issues, including the reappointment of Burnside CEO Neil Jacobs, which Ms Gago said was the trigger for the preliminary investigation.

Mr Jacobs resigned saying his ability to provide a safe and harassment free workplace had been compromised. He tendered his resignation to the council in writing, but was reinstated a week later following a request from the council to reconsider. Burnside mayor Wendy Greiner said Mr Jacobs’s resignation was delivered in accordance with the Local Government Act and his contract. She said that subsequently council had asked Mr Jacobs to reconsider.

Democrat MLC David Winderlich claimed yesterday that reappointment of Burnside Council chief executive Mr Jacobs may possibly breach the law.

He said legal advice showed the procedure followed with the CEO’s reappointment was against the Local Government Act.

“Under the law council has no choice but to declare the position vacant and advertise for applicants,” he said.

Mr Winderlich said residents and businesses were concerned that an unelected person was controlling the council. “If the minister’s inquiry is restricted to councillors and a handful of senior staff it will not have any credibility,” he said.