Councils will be blocked from boycotting Israeli products or pursuing other foreign policy goals that conflict with the Government.

Conservative aides said the measure was a response to growing concern about the "militant actions of left-wing councils" which they claimed was spurred on by the Labour leadership.

The new rules will stop politically-motivated boycott and divestment campaigns by town halls against UK defence companies and against Israel.

Cabinet Office Minister Matthew Hancock said the action was intended to prevent the "playground politics" from councils.

The Government will amend pension legislation to make clear using pensions and procurement policies to pursuit boycotts, divestments and sanctions campaigns against foreign nations and the UK defence industry are inappropriate, unless they are in line with action on a national level.

The same approach will be contained in new procurement policy guidance.

Communities and Local Government Secretary Greg Clark said: "Divisive policies undermine good community relations, and harm the economic security of families by pushing up council tax. We need to challenge and prevent the politics of division. Conservatives will provide the stable, competent and sensible Government that working people want to see."

In November last year, Leicester City Council agreed a boycott on products from Israeli settlements in the occupied West Bank.