The government is considering a change in the law after the BBC revealed a south London councillor had a gun crime conviction but could not be sacked.
Stephen Govier, a councillor in Southwark who runs a crime prevention scheme, was sentenced to six years in the US for shooting a man.
He did not declare the conviction - but a loophole stopped Southwark Council sacking him when it emerged.
Local government ministers are now reviewing the law.
When Councillor Govier was first contacted about his past he claimed he had shot an "intruder" at his home in California.
But court documents since unearthed by the BBC show he admitted previously knowing the victim, who had gone to his house to get cocaine.
Councillor Govier reached a plea-bargaining agreement with US prosecutors who originally accused him of attempted murder.
Instead he was sentenced for assault with a firearm.
He admitted dealing drugs to feed his own habit and said he was drunk and high on cocaine at the time of the shooting.
The victim, who was shot in the head, spent almost a month in hospital.
After Councillor Govier's conviction was revealed on 3 February, the Labour Party withdrew the whip from him.
But both Southwark Council and the Labour Party said they had no legal grounds to remove Mr Govier from the council. He refused to resign.
The Local Government Act 1972 only disqualifies people from standing if their conviction was in the UK or its dependencies and in the past five years.
The councillor's conviction was not in the UK and happened longer ago than that.
Local Government Minister Bob Neill told the BBC: "The government is reviewing the 1972 legislation which governs whether councillors and council candidates are debarred.
"People who have recently committed serious crimes should not hold public office.
"There is a strong argument for this councillor to resign, as he would be disqualified if the crime had been committed in Britain."
Councillor Govier has not commented on the latest development.
He previously said: "It is my desire to continue to work conscientiously and in the interest of my constituents to create a fairer future for all in Southwark."
Councillor Govier runs community group Lambeth Business Against Crime (LBAC) in partnership with Lambeth Council and the Metropolitan Police.
The LBAC's rules state that people involved with the scheme should have nothing on their record that would disqualify them from working for the police.
Both the Met and Lambeth Council said it was not their responsibility to vet him.
Councillor Govier, currently sitting as an independent councillor, was pictured on the campaign trail with then government minister and deputy leader of the Labour party Harriet Harman in the run-up to last year's general election.
- 3 February 2011