The city of Ferguson, Missouri, is being forced by the Obama administration to return two military vehicles that it obtained from the Pentagon, amid widespread concern and criticism over the deployment on American streets of equipment intended for war zones.

The US Department of Defense will reclaim a pair of Humvees that were given to the beleaguered St Louis suburb under a controversial program to distribute surplus weapons, vehicles and other gear, according to several government officials involved in the process.

“They have simply informed us they will be taking them back,” Jeff Small, a spokesman for Ferguson, told the Guardian in an email.

Several Humvees from regional police forces were among the military vehicles seen on the streets of Ferguson last summer as officers cracked down on protests over the fatal shooting of Michael Brown, an unarmed black 18-year-old, by a white Ferguson police officer.

The images were seen around the world: protesters clashing with camouflage-clad police who advanced toward their lines in armored trucks and were kitted out like soldiers – wielding assault rifles and firing teargas against emotional but largely peaceful demonstrations.

The heavy-handed police actions were sharply condemned by leaders such as Claire McCaskill, Missouri’s senior US senator, who said at the time they were compounding the problem. “We need to demilitarize this situation,” said McCaskill, who has since led a congressional inquiry into the issue.

Such vehicles returned on Sunday night to West Florissant Avenue, the site of many demonstrations over Brown’s death, after a black 18-year-old was shot by officers when he allegedly opened fire on their unmarked SUV following a gunfight with several other men. The man is in a critical condition in the hospital and has been charged with several crimes.

Pentagon officials said they ordered Ferguson to return the two vehicles in June this year after discovering in a data review that the city had been given twice as many Humvees in 2013 under the so-called “1033” equipment transfer program as they had previously known, without proper federal authorisation.

“The Ferguson police department officially has two Humvees on their books; the state coordinators provided the police department two more Humvees without following the proper transfer protocol,” Mark Wright, a spokesman for the Defense Department, said in a statement.

But this was denied by Missouri law enforcement officials, who in effect operate a warehouse for federal military equipment and act as broker between the Pentagon and municipalities in the state that are seeking it. The state officials said the Pentagon did give permission for Ferguson to have four Humvees before “losing the records” for two of them. Wright, the Pentagon spokesman, did not immediately respond to this claim.

Officials said Ferguson initially told the Pentagon they wanted to appeal against the decision to take back the vehicles, but this was rejected by the Defense Department. “So we’re going to go down with a trailer and truck and get them on an expedited basis,” said Mike O’Connell, the communications director for the Missouri department of public safety, which acts as the go-between with the US government in the equipment transfer program.

Wright said the two additional Humvees may be assigned to another law enforcement agency in Missouri after being returned by Ferguson. He said Ferguson was not being terminated or suspended from the 1033 program and could make future applications. The city is home to only 21,000 people and has a police department comprising about 55 officers, leading many critics to question the need for an arsenal of military-style equipment.

Wright also stressed that while “uncontrolled” equipment transferred under the federal program – such as office supplies and many other nonlethal materials – are the municipalities’ to keep, controlled equipment such as vehicles and weapons “remain on our books”. He said: “They are kind of on a long-term lease.”

More cosmetic change than reform

But while federal officials deny the Humvee reclamation was directly related to the long-running civil unrest in Ferguson, the city is an exception to the militarized-police rule.

Even after Barack Obama, prompted by Ferguson, ordered a government-wide review of the provision of military hardware to police, lethal weaponry, vehicles, equipment and cash continue to funnel down to police – only now with more layers of red tape.

Across the panoply of programs by which state and local police can acquire weapons, vehicles, aircraft and surveillance tools typically used by the US military and intelligence agencies, police must now merely jump through more bureaucratic hoops rather than face an outright ban on all but the most controversial items – many of which had not been distributed for years. Federal security agencies describe police departments as partners to aid, while pledging greater scrutiny over their requests.

Pursuant to a government-wide directive issued in May, police seeking sophisticated and potentially lethal hardware like shotguns or explosives must now provide a “detailed justification for acquiring the controlled equipment”. Applications must include acknowledgement of any civil rights violations in the recent past, with an explanation of corrective action. Police must also show “evidence of a civilian governing body’s review and approval or concurrence” – an endorsement that mayors, who depend on their police, may be unlikely to withhold.

In the event of a violation of usage conditions, US officials said, police would not necessarily have equipment confiscated. The Defense Department has long had its own rules for requisitioning its gear, as it retains the title to dispensed military hardware, but the Pentagon’s Wright said the military only reclaims that gear “under very rare circumstances”.

A Justice Department official said the relevant US agencies are “considering policies to return equipment acquired through other programs” besides the Pentagon’s program.

Under the new rules, for at least 60 days, police found to be in violation would be barred from receiving additional weapons, gear or vehicles, rather than having to return what they already have. Should police on the receiving end of federal largesse be accused of civil rights violations, they would be subject to a federal inquiry, including from the US Justice Department.

Critics argue that while the directive is a step in the right direction, any executive action could simply be undone by a future president. Kanya Bennett, a legislative counsel at the American Civil Liberties Union, said it remains imperative for Congress to pass a demilitarization bill as law.

“We want to make sure that any militarization reforms are permanent,” Bennett said. “The steps the administration has taken could be undone by the next administration, and we want to codify some of those reforms and, if there’s appetite, go further.”

The Pentagon’s controversial program to disburse surplus military equipment to local law enforcement, for instance, has seen more cosmetic change than substantive emendation.

The May directive, the major result of Barack Obama’s post-Ferguson “review” of police militarization, recommended that the so-called “1033” equipment distribution effort add oversight provisions, not ban currently provided tactical equipment, vehicles and weaponry.

Accordingly, the Pentagon will still distribute excess rifles, like M4s and M16s, and heavy armored trucks like the mine-resistant armor-protected wheeled vehicles (MRAPs) designed to resist homemade insurgent bombs in Iraq and Afghanistan.

Bennett said the ACLU would have liked to see the administration go further with respect to the types of military equipment police are barred from using, citing MRAPs and grenades in particular.

“Those are items we want to see come off the street,” Bennett said. “We are hard-pressed to find a legitimate purpose for an MRAP to be used by state and local law enforcement.”

Law enforcement agencies must now certify completed training in their usage, proffer a case for the gear’s utility to policing, and show that a “civilian governing body” agrees the equipment is necessary – a series of bureaucratic steps that civil libertarians consider insufficient.

Later this month, said Defense Department spokesman Wright, Pentagon officials will meet with representatives from state governors to brief them on the new rules, which formally go into effect on 1 October.

Since 1990, the program has disbursed $5.6bn worth of gear, according to Pentagon tallies.

While police are now formally banned from receiving armed helicopters, tracked tank-like vehicles, firearms .50 caliber or higher, or grenade launchers, the Pentagon had already ceased their distribution. (It had, however, provided officers with approximately 200 Vietnam-era M113s, a type of intimidating armored personnel carrier; disbursement stopped in 2011.)

An exception: the military can no longer provide tactical knives – which had a somewhat misleading formal characterization as a “bayonet” that attracted public unease – that it had until recently continued sending to law enforcement.

Even campus police can continue receiving military equipment under the 1033 program, according to the Pentagon – provided that such campus police entities are designated by the relevant state coordinator in the governor’s office as a legitimate law enforcement agency. The militarization of campus police has received new scrutiny after a University of Cincinnati police officer was indicted for murder last month after killing a motorist with one shot to the head.

Some of the military surplus is substantial. The Pentagon said it has given law enforcement 625 MRAPs since 2012, clearing motor pools lined with the vehicles after the reduction in ground combat in both US wars.

“The department is committed to ensuring that this congressionally authorized program to transfer excess DoD property to law enforcement agencies is accomplished in the safest and most sensible manner in order to ensure the proper stewardship over taxpayer resources,” said the Pentagon’s Wright.

$1bn per year for 'terrorism prevention'

A far more financially generous smorgasbord for law enforcement has received comparatively less scrutiny: a constellation of grant programs from the Department of Homeland Security (DHS). Known as the Homeland Security Grant Program and consisting primarily of the State Homeland Security Program and the Urban Areas Security Initiative, its roughly $1bn annual disbursement dwarfs the size of the Defense Department’s.

Unlike the Pentagon, the DHS program does not provide equipment. It provides something more flexible: money, with what has thus far been few strings attached.

A 2007 law underpinning it stipulated that only 25% of its largesse must be spent on “law enforcement terrorism prevention activities”; police cannot use its funds to purchase firearms. The result: the availability of heavy equipment to police, including helicopters and the BearCat armoured vehicles seen on Ferguson’s boulevards.

In April, DHS Secretary Jeh Johnson announced that the $587m Urban Areas Security Initiative will only fund requests from 28 “high-threat, high density urban areas”. DHS described the narrowed applicability of the program as a reflection of Congressional intent to target funding based on realistic threat indications.

DHS sources indicated that their belief also projected that the post-May changes would lead to greater internal scrutiny and oversight over requests from the police departments with which they partner. While the money will continue to flow, DHS, aided by the Justice Department, intends to play a more active monitoring role in filtering out frivolous requests, an attempt to balance its mandate to aid police with responsible usage.

Hank Johnson, a Georgia Democrat who considers Obama’s restrictions on militarized police helpful, has introduced a bill to codify it into law – since, he told the Guardian, “the next president could come along and reverse the executive order”. Originally and unsuccessfully introduced in the last Congress, the bill has now gathered 46 bipartisan cosponsors, but Johnson acknowledged that passage will be an uphill struggle.

“Right now Congress isn’t doing a whole lot of meaningful legislation. Congress is gridlocked with partisanship, so we’re not doing the business of the nation, including things like stop militarizing law enforcement, and that’s unfortunate,” he said.