A teacher who stood for the British National Party in a recent by-election has "no place in the teaching profession", a teachers' union says.
The NASUWT union has contacted Derby City Council expressing concern that Clive Jones is actively working in a pupil referral unit in the city.
The council said Mr Jones was conducting his duties "appropriately".
It stressed that the BNP was a registered political party and standing for it was not a breach of conduct.
Derby City Council has taken advice from the Department for Education and Skills and the General Teaching Council for England.
"As Mr Jones's employer, the council must take account of the fact that the BNP is a registered political party," the council said in a statement.
"It is the view of the General Teaching Council that standing as a candidate for this party does not, in itself, breach the code of conduct for teachers.
"The council's current view is that there are no grounds for taking any action against Mr Jones."
The council said it had a statutory duty to promote race equality and the consequences of breaching this duty would be "emphasised to Mr Jones".
The situation would be "kept under review".
NASUWT general secretary Chris Keates, said the local authority had a "legal duty of care for its pupils and staff" and she called for action to be taken "in a manner which protects their interests".
In a letter to the council, Ms Keates said: "I am sure that you will share the view of the NASUWT that those who subscribe to a racist and fascist agenda have no place in the teaching profession.
"This teacher has made public his affiliations and support for the objects and aims of the BNP by standing as a candidate in the local elections."
The BNP said the NASUWT's stance was "outrageous and disgraceful".
Spokesman Phil Edwards said: "This is totally unjustifiable and is designed to scare people from joining our party.
"It is a typical totalitarian Marxist approach by this union leadership."
Mr Edwards said the member in question would "not cause any prejudice to any pupil, whatever their race".
Mr Jones stood as a BNP candidate in a local council election in East Staffordshire on 29 June.