Luton Borough Council is considering legal action against the English Defence League (EDL) for using council logos on leaflets without permission.
EDL leader Stephen Lennon and member Kevin Carroll were served letters by the council after a protest at a new Discover Islam centre in the town.
The logos were on flyers distributed outside the centre at its launch, which Mr Lennon has denied making.
The council said it "will not tolerate" the copyrighted logos being misused.
"We have asked the EDL not to use them and will be taking legal action as appropriate," a statement said.
Mr Lennon said that he did not make the leaflets.
"They were handed to me in the town and I was just giving them out," he said.
"This logo is used on hundreds of pages across the internet and they are singling me out. Bring it on."