The Evening News revealed last month how the pop-up shop at Tollcross was being operated undercover by the city’s Conservatives.
There was no sign outside the former beauty salon to show it was raising money for the party.
And inside only a hand-written A4 notice saying “Edinburgh Conservative Shop” – which was almost entirely hidden by picture frames – revealed the purpose of the business.
Customers who assumed it was a charity shop complained at the time they had been misled. And after the Evening News story appeared, officials from the council’s trading standards department visited the premises at Lochrin Buildings – and discovered the volunteers running it did not have an appropriate trading licence.
Former Tory councillor Alistair Paisley, who is helping to run the shop, said: “Thanks to your story we had a visit from the trading standards people.
“They said we needed a temporary second-hand dealer trading licence and if we continued to trade we could be operating illegally.
“We shut the doors for a day and a half until we got everything sorted out.”
The shop was rented commercially by the Edinburgh Conservative Association on an eight-week lease. It is due to close on March 20.
Mr Paisley said the council officials had taken a pragmatic view and agreed to issue the temporary licence retrospectively on payment of the normal fee of £89.
He said: “We shut the door that morning after the officials came. We didn’t want to be trading illegally.
“The next day we sorted it out and I went up with the cheque the following morning.”
He said the Tories had run a similar fundraising shop on previous occasions, but had usually split the eight-week lease with a couple of charitable organisations, which meant they did not need a trading licence.
“This time, since we were on our own, we were not covered by any charitable status.”
Mr Paisley said the shop – which sells items donated by supporters – was attracting a lot of customers, but declined to say how much it had raised.
He previously insisted there was no attempt to mislead people. “If anyone asks, we tell them it is for the Tories,” he said. But he said the shop now displayed clear notices inside and out identifying it as a Conservative venture.
A council spokeswoman, said: “After visiting the premises, council officers advised that the shop required a second hand dealer trading licence. An application was received for a temporary licence, which has now been issued.”