Tower Hamlets Council has had its grant-making powers restored by the government.
The council’s former mayor, Lutfur Rahman, who was elected in 2010, was found guilty by the High Court in 2015 of breaking electoral laws before his 2014 re-election and removed from office.
One of the practices of which Rahman was found guilty was misusing voluntary sector grants to gain electoral support.
In a statement released on Friday, Sajid Javid, the communities secretary, said the council, which has been overseen by four commissioners appointed in 2014 by the Department for Communities and Local Government, would have powers to award grants to local charities returned to it.
Under Javid’s proposals, the grant-making powers would have a "phased return" before the four commissioners leave at the end of March.
Javid said: "In the past we had a situation in Tower Hamlets where the former mayor was handing out grants against the advice of its own officers, which an election court later found amounted to the corrupt practice of bribery. There was also no monitoring of what hard-earned taxpayers’ money was being spent on.
"Since commissioners have been in place, root-and-branch reforms mean I am now minded to start a phased return of grant-making responsibility back to the mayor, so these key local decisions can return to those who have been directly elected by local residents.
"This is a positive first step, but I won’t restore full powers until I can be sure residents’ money is in safe hands and will halt the process if commissioners raise any concerns."
A new mayor, John Biggs, was elected in the London borough in a 2015 by-election.
In a statement, Biggs said: "I welcome this vote of confidence from the secretary of state, which reflects the progress we have made as a council and our ambitions to become more outward-looking, transparent and effective at providing the best possible services to our residents. We continue to learn the lessons of the past and to repair the damage left by my predecessor."