The Associated Press news agency initial reported in August that the town police department had tried to infiltrate Muslim neighbourhoods and mosques.
Mr Bloomberg has insisted the city's counter-terrorism efforts are legal.
Fourteen Muslim leaders and variety of alternative community figures - together with rabbis, a Roman Catholic nun and Protestant pastors - signed the letter boycotting the Friday breakfast, that is supposed to celebrate the city's diversity.
Moles 'played cricket'
Rabbi Michael Weisser, however, said beforehand that he would attend the breakfast once Muslim friends urged him to use the chance to lift their issues with the mayor.
Rabbi Weisser told the Associated Press he had no drawback with the police department following leads, however objected to any official targeting of Muslim organisations.
Imam Al-Hajj Talib Abdur Rashid poses for a portrait in big apple on twenty nine December 2011 Imam Al-Hajj Talib Abdur Rashid was a signatory to the letter of protest
"From a Jewish perspective, it jogged my memory of things that were happening within the Nineteen Thirties in Germany," Rabbi Weisser said.
"We do not want that in America. we will not be painting a full cluster of individuals with an equivalent broad brush."
But not all Muslim leaders boycotted the event.
Imam Shamsi Ali, of the Islamic Cultural Center of recent York, said: "I suppose everybody disagrees with the method the NYPD is penetrating the community, however i believe generalising everything else as dangerous isn't acceptable."
Mr Bloomberg has previously won praise from the city's Muslim leaders for strongly defending proposals to create an Islamic prayer and cultural centre close to the previous World Trade Center website.
But reports that the NYPD collected info on people that were neither accused nor suspected of wrongdoing have led to a way of betrayal among some within the community.
According to AP, undercover officers gathered info through chatting with search homeowners and patrons and enjoying on cricket groups, as a part of a surveillance programme designed by a CIA officer.
