Police said they will investigate how an underage candidate came to stand in the local elections if an official complaint is made.
The Liberal Democrats have said Philip Hickson, leader of Derby's Conservatives, broke electoral law by letting a 20-year-old candidate stand.
Randeep Kaur Samra is running for election in Derby City Council's Sinfin ward on Thursday 4 May.
Conservatives claim an administrative error caused the confusion.
Derbyshire Police said they were still waiting for an official complaint to be made by an opposing party but said they would give the matter "due attention".
Richard Smalley, deputy Conservative leader in Derby, said: "Randeep was selected to stand because she is the ideal candidate for Sinfin. We feel she would bring a fresh perspective on a number of issues in the ward.
"She was never formally asked for her age. A series of unfortunate assumptions have been made."
But Labour councillor Chris Williamson has demanded that the Conservatives apologise for the error.
He said: "They must have been aware of the law and to attempt to lever in someone who does not fit the criteria is quite wrong."
Liberal Democrat Hillary Jones added: "If she was elected, she would not be able to take up position on the council.
"Should she get elected I am sure it could be appealed in the electoral court."
Steve Dunning, assistant director for democratic services at the city council, said: "The guides we put out for candidates make it clear that to be a candidate you have to be 21.
"She will be able to stand and the election will go ahead with her name on the ballot paper."
"The appeal would go through an election petition at an election court."
The Conservatives have confirmed that they will not withdraw their candidate.
Other candidates in the Sinfin ward are Leigh Alcock for the Liberal Democrats and Labour's Robin Turner.