The Redcar and Cleveland Council Security Panel, which was formed in the wake of the decision earlier in the year, argued that there was insufficient consultation with the local community and poor management.
Panel member, Councillor Vilma Collins said: "Just months after a new £357,000 building for the lifeboat was opened, it was closed and that must be a very, very false economy.”
But the Charity Commission said it was satisfied that trustees of Teesmouth Lifeboat had acted properly.
A spokeswoman said: “We believe that the trustees acted in the interests of the charity in coming to their decision.”
In a written reply to the panel, Michael Vlasto, operations director at the RNLI, defended the move.
"I fully understand that some of the volunteers from Teesmouth feel angry and clearly believe we have made the wrong decision,” he said. “However, the decision was only made after much discussion and consideration, and I am confident that it is the right choice."