Any government decision to reduce the 2-metre physical distancing rule in England could mean councils and retailers will have wasted millions of pounds on signs and other preparations for the reopening of high streets, it has emerged.

Local authorities and retail groups told the Guardian that much of a £50m government fund handed out to councils in England in recent weeks had been spent on signs and barriers based on 2-metre distancing, much of which would need to be scrapped if the distance was reduced.

The government has said only that the distance is under review. However, Conservative MPs are increasingly pushing for a reduction to 1 metre, saying this would greatly assist shops, many more of which can reopen from Monday, and then pubs, restaurants and cafes.

While retail groups say a 1-metre distance would be a boost for shops, they have expressed frustration at the lack of notice. Some council leaders, meanwhile, said confusion over the measure epitomised a chaotic central government approach to the pandemic.

In the past few weeks, the Ministry of Housing, Communities and Local Government (MHCLG) has distributed grants from the £50m Reopening High Streets Safely Fund to councils across England, to be used on signage and barriers on streets and in shops.

Tudor Evans, the Labour leader of Plymouth council, which has received £235,000 from the fund, said it had been used for large numbers of discs on street surfaces indicating 2-metre distances, and to help hundreds of shops prepare. These measures would need to be redone if the distance was reduced.

“If it changes in the next few weeks it will make people angry,” Evans said. “A lot of people have sent a lot of time in the public sector, and in the private sector, to get things ready for opening up in accordance with government regulations. To have this uncertainty, this close to opening, is really an emblem for how chaotic the government’s handling has been.”

Andrew Goodacre, the chief executive of the British Independent Retailers Association, which represents smaller shops, said any reduction would receive a mixed reception from members.

“At 1 metre you can double your capacity, so from a business point of view it’s beneficial,” he said. “But on the negative side, for three months we have delivered a very strong message on 2 metres, and all the signage says 2 metres, so that would all need changing. So I think the enthusiasm of more capacity would be tempered with frustration with having to change some or all of the signage.”

The former Conservative leader Iain Duncan Smith is among the Tory backbenchers pushing for a change, telling the BBC that reducing the 2-metre rule was “the critical component around which everything coming out of lockdown hinges”.

On Thursday Boris Johnson’s spokesman said the 2-metre rule was “always kept under review” and was among a number of contagion risk factors that were being considered.

Amid the uncertainty, some councils have taken matters into their own hands. Steve Houghton, the Labour leader of Barnsley council, which received £240,000 from the MHCLG fund, said local signs did not specify a distance.

“We decided this is going to change,” he said. “So we do have some signs with 2 metres on, but the bulk has been saying things like ‘stay apart’, ‘keep your distance’, that kind of thing. It might be 1 metre this time tomorrow.”

Houghton said he felt this summed up the central government approach: “They seem to be reacting to situations rather than reading situations – that seems to be the case all the way through, whether care homes or PPE. Is the virus managing the government or is the government managing the virus?”

Advice given by the environmental and modelling group of the government’s Sage scientific advice body on 26 April was that the risk from face-to-face contact drops to an acceptable level at 2 metres.

Scientists say any change of advice would have to be backed by clear rationale on how the epidemic is being managed. “No measure should be seen in isolation,” said Prof Susan Michie, the director of the Centre for Behaviour Change at University College London. “One would expect measures to be part of an overall strategy, but we haven’t seen that. We’re just having different announcements about different things at different times – things are being suddenly sprung on people because of political expediency.”

Michie said a concern over replacing the 2-metre guidance with 1 metre would be that to many people it would signal things going “back to normal”.

“If you begin to say that 2 metres doesn’t matter any more – because that’s how it will be seen – it undermines the mental model of how transmission happens that’s so carefully been built up over the past few months,” she said. “It seems to me that now is not the time to be lifting restrictions unless there’s a very good argument. The risks will be higher and more people will get ill.”

The MHCLG said it could not comment on speculation about a change to the rules.