Five cross-party councillors brought the motion against Cllr Steve Siddons, the Labour leader of Scarborough Council, raising concerns of a "toxic" workplace environment, and a lack of transparency and inclusivity in decision making.
Following 45 minutes of debate, the motion was defeated by 26 votes to 20.
Speaking at the meeting, Cllr Siddons said "this charade is becoming an annual ritual from a small group of people who should frankly know better".
It was the third motion of no confidence faced by Cllr Siddons and his cabinet in as many years, following a failed challenge in January 2021 which the leader won by 25 votes to 20, and January 2020 by 26 votes to 16.
"I am happy to stand on my record as leader," Cllr Siddons said. "There is talk of not being open and transparent, nothing could be farther from the truth.
"We've delivered on the vast majority of our manifesto pledges with the help and support of our independent colleagues who have seen the sense in collaboration for the benefit of this borough.
"We've also been fortunate to be able to secure the support of Government and local business through various funding streams. This has only been possible through collaboration, cooperation and constructive dialogue; being open and transparent."
Today's motion was brought by the borough’s Deputy Mayor and Yorkshire Coast Independents Alliance (YCIA) member Cllr Roxanne Murphy.
The motion was supported by Cllr Sam Cross, leader of the YCIA, and fellow group member Cllr Neil Heritage; Cllr Bill Chatt, part of the Cluster of Independent Members, who seconded the motion; and Conservative Cllr Alf Abbott.
During the discussions today Cllr Roxanne Murphy accused Cllr Siddons of spending the "public purse as if it was Monopoly money, with little regard to the people we serve or what they want, or how they want the money spent".
Cllr Roxanne Murphy said that "a line must be drawn" and "I don't feel like when we ask the difficult questions that they are answered; it feels like getting blood out of a stone".
Cllr Mike Cockerill acknowledged the "genuine concerns" of councillors, but raised the issue that electing a new leader and cabinet would not provide significant change ahead of the authority being absorbed by a new North Yorkshire council in 2023.
Cllr John Casey said that Filey has only "flourished" under Cllr Siddons' leadership since 2019 and that under the previous administration "nothing" had happened for the area.
The 13-strong Labour Group has been running the 46-member council with the support of the Independent Group councillors since May 2019.
During the debate, two councillors made claims about unelected individuals from outside the council seeking to manipulate the authority.
Cllr Heather Phillips said: "As someone who has experienced the truly toxic nature of many meetings I frankly cannot see how we can continue, there must be a refresh.
"I'm thoroughly sick of it, the anxiety that it is causing is intolerable."
Cllr Siddons added: "This motion today is a shameful misuse of council resources and staff.
"There's no hidden agenda here, there are no secret deals, there's no wasting of money. We are simply intent on improving the prosperity and subsequent life chances for the people of this borough. That's what I was elected for, that's what we were all elected for.
"Unfortunately, there is a very small, but vocal group of members, who with the assistance of some unelected people seem intent on stopping progress at any opportunity; hence this latest attempt to disrupt.
"This is not good for the borough. Having a strong and stable administration is key to delivering the best outcomes, there's only one loser here today and that is the public as you few seek to create unrest and destabilise this council whilst you waste time and resources on this self-aggrandisement; the public are more interested in what we can do for them, not what we can do for ourselves."
Convention dictates that a leader who loses a no-confidence motion resigns immediately and a vote for a new leader takes place.