Hackney Council's planning department is being probed by the Commission for Racial Equality (CRE) following a complaint about alleged anti-Semitism brought by the borough's main orthodox Jewish community group.
The dispute is over applications for planning extensions to residential properties. Until recently, the group found that applications for residential extensions were routinely granted by the council.
However, Hackney Council is now undertaking a major planning overhaul, which has led to planning applications for domestic extensions being rejected.
A Hackney council spokesman said: 'I can confirm we are in correspondence with the CRE, and we are currently going through a planning consultation and have made it aware that we will be running an equality-impact assessment.'
Many orthodox Jewish communities are very family orientated, and generations of families tend to stay under one roof, hence the need for home extensions.
Since the planning rejections have become more regular, the orthodox Jewish community has decided it has no choice but to report the council to the CRE.
The Hackney Council spokesman said: 'It has all been blown well out of proportion. There are many different facets to this planning reform, and it is not just this community that is being affected, it is a borough-wide policy change.' by Richard Vaughan