Last updated at 16:17pm on 6th November 2007
Target: Alan Craig with his wife Sally
The film on video-sharing website YouTube is entitled In memory of Councillor Alan Craig and contains pictures of him with his wife and two young daughters.
It was apparently posted in retaliation for his opposition to the mosque.
Mr Craig has now contacted police in fear of his family's safety and demanded that the video be taken down.
Islamic group Tablighi Jamaat wants to open the 12,000-capacity "mega-mosque" in Newham near the main 2012 Olympic site.
The FBI has described the group as "a recruiting ground" for al Qaeda, which it denies.
Shoebomber Richard Reid and 7/7 bombers Mohammad Sidique Khan and Shehzad Tanweer were members.
Mr Craig, 61, a member of the Christian Peoples Alliance on Newham council, has led a local campaign against the mosque which is planned for the site at Abbey Mills next to West Ham Tube station.
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Chilling: The YouTube video shows Alan Craig with his family
Obituary: The YouTube posting that threatens Alan Craig
The businessman today said he would be seeking advice about whether his 40-year-old wife, Sally, and daughters were safe.
He said: "Targeting me is one thing. But to use my wife and children is outrageous. This video obituary is either a threat or a very sick joke.
"Some people will look at this as an open invitation to take me out because I am opposing the mosque. That is not the way to operate in a democracy."
The video opens with its title and the words "To God we will all return" before showing a series of photos of the councillor, his family and political allies set to Elvis Presley singing You Were Always On My Mind.
The two-minute video ends with the message "The mosque will be built in time for the 2012 Olympic Games."
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Opposition: Alan Craig doesn't want Europe's biggest mosque to be built
The video was posted by abdullah1425 whose page on YouTube claims he is 23-year-old Muhammad from Stevenage. It has links to material relating to Tablighi Jamaat.
In one comment to another user posted on the site he said: "Jihad starts from the moment your mother gave birth to you."
There is a link directly to the page from the mosque's official website but a spokesman promised to take it down if anything "inappropriate" was found.
He added: "We are not responsible for the content of external websites. But we condemn totally anyone who incites violence."
Plans for the 18-acre-complex, which is expected to include a school for 500 boys, have yet to be submitted to Newham council for approval.
Mayor of Newham Sir Robin Wales said he did not agree with Mr Craig's views but that he was entitled to express them.
He added: "If this has been reported to the police then it is right that they should investigate it."