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Two hi-tech units were installed to protect guests’ bicycles and sports equipment during their stay.
But three locals objected when the owners applied for formal planning permision.
Officials revealed complaints that “the cameras result in an uncomfortable and unpleasant feeling of being overlooked when walking on the public footpath”.
Additional concerns were that they overlooked neighbouring properties invading their privacy and “exacerbate the existing situation of those properties being overlooked by windows from the rear of the building”.
The Dolphin Inn, on the town’s Queen Road, had lain empty for 40 years before the boutique hostel opened its doors in July this year.
Offering rooms with access to self-catering facilities and dormitory beds it provides secure bike storage at the rear for its active guests.
Planning officers said Dunbar Community Council supported the CCTV cameras being put at the back of the hostel, saying they would improve the security of the property.
The officers’ report described the cameras as “eyeball” style and said pictures taken from them had been provided by the hotel showing they did not intrude into neighbouring properties.
And they ruled the white cameras were not “alien” to the building.
They said: “The two cameras are not intended to directly overlook any parts of the neighbouring residential properties.
“Furthermore, the images captured by the two wall mounted CCTV cameras do not directly overlook any neighbouring garden.”
Planning permission was granted for the cameras.