Organisers of an award designed to promote businesses in Streatham were left red-faced after they crowned a home-based wedding cake designer from Croydon the winner.

Residents and councillors called for a review of Streatham’s Favourite Business award, launched last year to highlight the area’s most talented entrepreneurs as firms struggle to survive during the financial downturn.

Residents submitted nominations to South London Business (SLB), which is also responsible for the Lambeth Business Awards, for their favourite enterprise.

But in a prize-giving ceremony at the Hideaway bar last Thursday, Norbury-based baker Rachel Hill beat more than 100 businesses to win the title for her bespoke cake company Rachelle’s.

Miss Hill supplies cakes to cafes in Streatham High Road, but does not live or work in the town centre. Following the result, residents voiced their disappointment on Twitter and councillors called for the votes to be recounted.

Philip Sidaway, of Valley Road, described the event as “a massive slap in the face for genuine Streatham traders” and he has reported the mix-up to Streatham MP Chuka Umunna. Streatham Hill councillor Ashley Lumsden said: “I am making no comment about her cakes. I am sure they are delicious, but they are not Streatham cakes.”

Two family-run businesses in the High Road, I Love Coffee and Charles Carter Hair, were announced as runners-up for the much-coveted award.

Stefano Costa, who runs I Love Coffee with his brother Sandro, said there was “no bitterness” about the competition, but said he hoped to reclaim the title in 2012.

Ross Feeney, director of business support for SLB, said any business that traded in Streatham and marketed their products in Streatham could enter the awards this year.

He said: “The entrant did not have to produce the products in Streatham itself.

“Rachel’s cakes are marketed in Streatham and she has supplied her cakes to three cafes in Streatham High Road.

“She entered the awards and mobilised her customer base to win the awards.

“The criteria to win the awards is the company that gets the most votes, as voted by their customers, wins.”

SLB said it would now “tighten the criteria to ensure businesses must be within the ward area”.

Speaking to the Streatham Guardian, Ms Hill said she was invited to enter the awards by SLB, adding she was “embarrassed” and “upset” by the result and the reaction from residents.

She said: “The organisers should be aware of who they are asking to enter the competition. If there were strict guidelines then that should have been made clear. I wish I’d never entered.”