Councils must prove they are not using motorists as a "cash cow" by publishing full details of money raised from parking tickets, MPs have demanded.
They warned that deliberately raising funds from parking fees was illegal.
It follows criticism of councils who are on course to profit by £14m a year from parking charges across the North East.
Figures published by the Department for Communities and Local Government and collected from local authorities showed that Newcastle City Council expected to make a surplus of £7.3m in 2013-14, the financial year currently under way.
Northumberland County Council expected to make £1.6m while North Tyneside expected to make £952,000 and Gateshead expects a surplus of £174,000.
Councils insisted they were keeping parking costs down - and pointed out that the money they raised went back into improving the road network, benefitting motorists.
But the Commons Transport Committee has now demanded that every local authority publish an annual parking report to show precisely where their parking revenues come from and how any income is being used.
Parking enforcement should usually do no more than cover costs, the MPs said.
And local authorities must work with businesses to develop innovative parking solutions that work for their area.
Committee chair Louise Ellman said: “Parking enforcement is necessary for managing demand on the roads, however, the use of parking charges and fines specifically to raise revenue by local authorities is neither acceptable nor legal.
“Yet there is a deep-rooted public perception that parking enforcement is used as a cash cow, so it’s essential that local authorities apply stringent transparency.”
Mary Creagh MP, Labour’s Shadow Transport Secretary, said: “This is a serious report that demands a serious response from ministers who should stop thinking up new ways to hit hard pressed motorists in the pocket.”
But councils insisted that they needed to enforce parking restrictions in order to keep the roads safe and ensure people were able to park near their homes and near shops.
Coun Peter Box, chair of the Local Government Association’s Economy and Transport Board, said: “As this report recognises, parking controls are not being used by councils to raise revenue. They are essential for keeping motorists and pedestrians safe, traffic flowing and ensure people can park near their homes and local shops.”