Sarah Hill, Leicestershire county councillor for the area, added: “There’s a major clear-up going on.
“It’s a smelly, dieselly slick in an area that’s popular with dog walkers. It’s pretty horrible.
“It’s only about 60m (196ft) from the nearest homes.
“There was a fear it would end up in the River Welland, but I think that has been prevented.”
The BBC asked the EA how much oil had leaked into the ditch.
In a statement, the agency said: “We are aware of an oil pollution in a drainage ditch adjacent to the A6 road on the eastern side of Market Harborough.
“We ask that the public avoids the site until the clean-up is complete, to allow the contractors to continue their important work.”
The agency said it had not seen an impact on wildlife and that it was monitoring the situation as the clean-up continued on Monday.
Harborough District Council leader Phil Knowles said the authority had offered to help the EA with the clean-up.