The council yesterday received a 390-name petition calling for it to take legal action after it emerged that ParkingEye had been issuing fines to motorists who overstay the two-hour limit in the supermarket's car park in Whitehaven without consent.
Councillors ruled however, on receiving legal advice, that it would be unlikely to win a prosecution and voted to stand by the original position of not pursuing legal action or a compensation claim.
Mayor of Copeland Mike Starkie said: "The barrister agreed that our decision not to take this forward was the right one; we would be unlikely to win a prosecution.
"Although we understand some people would like to see their parking tickets rescinded, we are not willing to risk council taxpayers’ money – possibly a six-figure sum – when the likelihood of success is remote."
ParkingEye erected 32 signs and a number-plate monitoring camera in August 2014, but landowners Morrisons only applied for the council’s permission in January 2016, blaming an “administrative oversight".
Copeland gave retrospective planning permission for the camera and advertising consent for the signs last month.
The council ruled at the time that it would not pursue Morrisons legally on the lack of previous advertising consent for the signs, and that action would only have been taken on the cameras if retrospective permission had not been granted.
As the request of Whitehaven town council and the petition organised by Councillor Jayne Laine, Copeland revisited its original decisions but they remains unchanged.
Clinton Boyce, Copeland's legal services manager, said: "The Court of Appeal guidelines say Morrisons was carrying out a perfectly lawful operation [in issuing parking tickets on its own land], and the lack of advertising consent for the signs does not render it unlawful.
"The barrister says our original decision was the right one. In my opinion, there is not a good chance of a successful prosecution, and we should not put the public's money at risk to pursue this."
Ms Laine said: "ParkingEye has been taking money off people without the proper planning permission.
"I’m not saying that there doesn’t need to be parking enforcement, but it has got to be done through the proper channels."