Ms MacDonald, the MSP for Lothians, has heavily criticised recent raids by Police Scotland on the venues as damaging for efforts to protect women working as prostitutes.
Officers had effectively abandoned the long-running tolerance of the sex industry in the city.
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But last night seven of the 13 premises targeted by Police Scotland were granted renewals for entertainment licenses after a six-hour hearing by licensing chiefs.
Ms MacDonald said: "I cannot congratulate the council enough for finally standing up [to the police]. This new wave of police and their zero tolerance policy is wrong.
"To try and scrap a policy that has such a wide-reaching effect, with so much support, is nonsense and everyone can see that."
Councillors rejected a request by police to include a condition that no items of a sexual nature be allowed on the premises, which was taken by charities including Scot Pep, which supports sex workers, to include condoms.
Police Scotland said it did not advocate the banning of the contraceptives. But Ms MacDonald said: "By including the presence of condoms in their evidence and then calling for items of a sexual nature to be banned, it is pretty implicit."
The decision was welcomed by those saunas given the go-ahead.
A representative for the New Town sauna said: "They've given us the licence. Voted four to three. Brilliant news."
One sauna boss said: "We've agreed to the new conditions but realistically what happens in a private room between two consenting adults is their business. But we will stick to what they have asked."
The five cases heard in public were Carol's Sauna, Easter Road; London Street Sauna; Ambass-ador Sauna, Lothian Road; No 18 Albert Place; and Steamworks, Broughton Market.
The saunas agreed to additional conditions of no alcohol on the premises and that the sauna should be in good working order, where applicable.
A suggestion by police that standard massage tables should be a feature in such premises as well as a call that people offering massage should have certified qualifications were rejected due to "uncertainty" over the scope of the stipulations.
Further conditions put forward by police - including that no-one under 18 should work there and that no-one should live on the premises - were said to be already included in licensing terms.
Two of the saunas are under-stood to be for gay and bi-sexual men.
One licensee insisted sex was not sold on her premises, No 18 Albert Place. Kathleen Dykes said: "If sex does take place it takes place between two consent-ing adults in a private room which is no different from a hotel."
Superintendent Matt Richards said police recommendations to the committee focused "on ensuring the safety and wellbeing of the users and staff at the premises".
He said: "At no point do the recommendations make reference to the banning of condoms.
"The issue of prostitution is a complex one and we work with the City of Edinburgh Council and local health services to ensure the safety of those involved in the sex trade."
The saunas whose cases were held behind closed doors were thought to be Newtown Sauna, Dundas Street Sauna, the Scorpio Club, Paradise Sauna, Blair Street Sauna, New Gentle Touch, Executive Sauna and Merchant Street Sauna.