Sometimes a Japanese person will say to me:
そんなに丁寧な言葉を使わなくてもいいんですよ。
This is an invitation to be less formal. But how much less formal? As I have experienced, sometimes unintentional gaffesunintentional gaffes can be committed blithely as one learns to navigate the treacherous waters of the politeness hierarchy. Note that the expression itself uses です even though it is a request to use less formal speech, and that is the level of politeness I would normally be using. So I find the whole matter confusing. The eternal politeness dance ...
Now, here's the catch: I feel it would be rude to ask something like "What level of politeness do you suggest I use?" That might come off as sarcastic or, worse, a rebuke. Any advice?
Edit to add more detail
An example of this kind of occurrence: At a lunch after a business meeting, I was using standard TV keigo: desu, -masu, plus o- and go- where appropriate, plus a bit of nasaimasu and itashimasu to senior people. The gentleman seated across from me (on about the same level as me), said this rather matter-of-factly. Honestly, I really wish he hadn't said this. It was like saying "Don't worry about the snakes, just stick your hand in there."