East Devon District Council has admitted it is currently powerless to control how a de-regulated car park is used.
The council said it is aware of vanlifers - people who live in a car or van either part time or full time - using a site behind the Marks and Spencer Foodhall, in Royal Avenue.
The Journal understands there have been caravans and motor homes parked in on the site for around three months.
The site is owned by East Devon District Council (EDDC), however, the authority has confirmed that the site was re-regulated as a car park to facilitate works to improve the town's sea defences.
This has left the council powerless to stop motor homes and caravans parking there.
EDDC says it is looking at future regulation of the site.
An EDDC spokesman said: "We are aware of a number of vanlifers who have been using the area behind Marks and Spencer, in Royal Avenue, in Exmouth.
“The car park was de-regulated as part of the tidal defence work to allow it to be used as a construction compound and site office, and so far a new parking places order has not been applied, this means we cannot stop campers and motorhomes parking there at this time.
“The council is currently considering the future regulation of the site and it will be discussed next month, at a campervans and motorhomes car park workshop.”
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