The council revealed the names and ages of all members of the households, their children's educational and medical needs, even the family's source of income and occupations during a planning committee meeting.
The travellers from illegal sites in Hovefields, Wickford, and Dale Farm, Crays Hill, had complained to the local government ombudsman that the disclosure had breached their human rights and data protection law.
Ombudsman Tony Redmond found maladministration causing injustice and recommended the council pay each complainant £300 compensation and send them a letter of apology.
His report said: “Fortunately, neither the complainants nor their children suffered any serious repercussions.”
But the ruling has infuriated Len Gridley, a long-time campaigner calling for the eviction of hundreds of travellers from a nearby illegal camp.
Mr Gridley, 49, said: “This is an insult to all those law-abiding and tax-paying residents who have had to put up with the gipsies' illegal sites on their doorsteps.
“They are being compensated for the distress they've been caused. What about the distress caused to us? My house has become almost worthless since they moved in. We have to put up with abuse on a daily basis.
“They know their rights and this is another example of them exploiting the system.”
Basildon council looks set to resist the demands for compensation.
Planning cabinet member Cllr Tony Ball said: “We have so far taken the view that financial compensation is not appropriate in these circumstances but the ombudsman has asked us to reconsider this which we will. I apologise if their feelings were hurt, we will be writing to them.”
Cllr Ball explained how the council had fallen foul of the ombudsman during the 2006 meeting, which had been called to update councillors on plans to evict the three families and others from illegal sites in Crays Hill.
He said: “In the absence of any official guidance the council took the view that because of the mistrust between the communities involved in this issue, all interested parties should be entitled to see the information on which we based our decisions.”