Sheffield Council officers warned councillors they could face a legal challenge if they used budget cuts as the main reason for axing libraries.
The authority could close 14 of 27 community libraries to save £1.6 million a year from next year, unless community groups and other organisations are willing to take them over.
Expressions of interest include a single bid to take over Ecclesall, Hillsborough, Woodseats and Walkley libraries.
Details of interested parties or the total of libraries subject to bids have not yet been revealed.
The possibility of a legal challenge over library closures was discussed in internal emails between officers and councillors, which have been obtained by The Star.
Lynne Richardson, project manager for the council’s library review, raised the problem when she responded to an email from Manor Castle Labour councillor Jenny Armstrong.
Coun Armstrong wanted to emphasise how library closures were a consequence of Government funding cuts.
Sheffield is axing a further £50 million from its budget over the next year.
Coun Armstrong said: “The current strategy reads like we are making changes as the current service has loads of failings, when this is not the case.
“I think we should be a lot clearer that the change is budget-led, due to Government cuts.”
But Ms Richardson explained the Government advises councils that library closures should be to ‘ensure a better, more efficient service’ rather than ‘just to save money’.
She said: “The legal advice we have received highlights (principally on legal challenges faced by other local authorities) that finance must not be the only driver.
“If we do not follow this guidance, we may find any future legal challenge could be successful.”
Councils have a legal requirement to provide a ‘comprehensive and efficient public library service’ under the 1964 Public Libraries and Museums Act.
Many details in the emails between officials and councillors obtained by The Star were blacked out - including the identities of parties interested in taking over libraries.
One organisation sought financial details regarding the running of Ecclesall, Hillsborough, Walkley and Woodseats libraries but was refused details.
The organisation was told such information would be revealed at a later stage.
It is not known whether the body is still interested in running the four sites.
Sheffield Council said an announcement is likely next month on which libraries could be taken over - and which may face the axe.