Gary Privett and Nigel Barks were allowed to keep watch over the council's street cleaning depot in Nursery Lane, Fengate, even though they had not undergone the necessary criminal record and identity vetting by the authorities.

Although the men had earlier been warned they faced prosecution if they worked without a licence, they were still employed by now-defunct security firm and council contractor Central Security East Anglia.

Following an investigation by the Security Industry Authority (SIA), the pair admitted the offences at Peterborough Magistrates' Court and were ordered to pay fines and costs totalling £780.

Security licensing was introduced in April 2006 and requires anyone working as a nightwatchman, bouncer or cash delivery driver to go through identity checks, criminal background searches and training beforehand.

Nina Best, prosecuting for the SIA, said: "The legislation was brought in to address serious problems in the security industry and ensure standards could be raised and enforced rigidly.

"All individuals are required to go through the SIA vetting process and receive a security licence before they can engage in any licensable activities."

The court was told that Privett (54) worked 10 unlicensed shifts at the council depot over three weeks in January, and Barks (59) worked illegally for a single shift during the same month.

Privett, of Northborough Road, Milking Nook, near Peterborough, was in the process of applying for an SIA licence at the time but Barks, of Whitwell in Paston, Peterborough, could not afford the £245 fee.

The pair, who had no previous criminal convictions, told magistrates their employers had cleared them to work, but they nevertheless pleaded guilty to working while unlicensed.

Privett, who now has an SIA licence, was fined £200 and ordered to pay £400 costs.

Barks, who is unemployed, was fined £50 plus costs of £100.

The two men must also each pay a victim surcharge of £15.

Peterborough City Council's head of operations for city services David Denson said the authority had no knowledge the men were illegally employed when they started work.

He said: "When Central Security East Anglia was contracted to carry out security duties, it was legally required to provide licensed personnel.

"As soon as it came to our attention that these men were not licensed, they were no longer allowed to work at the city council.

"We invited the SIA on to council premises to investigate thoroughly and have continued to work with the SIA to bring them to justice."

The security firm itself is now under new management and has been relaunched under the shortened name Central Security.

Managing director Simon Lamb said: "These two men no longer work for the company and we will not employ non-licensed staff. Everything is done properly now."