New limits on gatherings have come "too late" after 12 people tested positive for Covid-19 after a graduation party, a council leader has said.
Broxtowe Borough Council's Milan Radulovic said the cases came after a celebration at the Royal Oak pub in Watnall, Nottinghamshire, last week.
The Labour councillor said guidelines were "too vague" and few business owners "understood what they were".
He added the the pub had followed all social distancing guidelines.
Nottinghamshire's director of public health Jonathan Gribbin confirmed the party of 20 had taken place in an annex to the main pub.
He said: "We are satisfied that it was limited exposure to other customers in the pub."
Since the outbreak at the Royal Oak, the government has announced that social gatherings of more than six people will be illegal in England from Monday.
It comes after a steep rise in coronavirus cases across the country, but the legislation will not apply to schools, workplaces, or Covid-secure weddings, funerals and organised team sports.
Mr Radulovic believes the government did not act quickly enough to curb possible outbreaks.
He said: "The guidelines were far too vague, the guidance for businesses can be misinterpreted in several ways."
The councillor said since the relaxation of social distancing Broxtowe has seen its seven-day average of Covid-19 cases increase from eight per 100,000 in August, to 23.8 per 100,000 last Friday.
He said: "There should've been stricter, clearer guidance, and I'm now worried about a second lockdown, which would be devastating for businesses.
"The government's U-turn has come too late to stop this outbreak."
Last week the pub's owner Zach Towers closed the pub for two days, and said: "To protect our staff and customers we are closing for two days to deep-clean our pub. We have not been told to close but have chosen to do this ourselves."
A nearby pub, the Dog House, in Kimberley, also took the decision to close "in light of the outbreak of Covid-19 in the area".