Westcountry councils face further council tax struggles and multi-million pound budget shortfalls if they accept a one per cent Government grant in return for freezing bills next year.
All but two local authorities in Devon and Cornwall last year accepted the Government's offer of a 2.5% payment in exchange for keeping council tax on hold.
The agreements were struck amid warnings that the one-off deal would leave a lasting deficit with the cash not being built into ongoing budgets.
Chancellor George Osborne has now announced the deal will be offered again next year but with councils, police and fire services, receiving just a one per cent grant.
For Devon County Council that would be mean accepting £3 million instead of the £8.2 million it received last year. Cornwall Council would get some £2.4 million compared to £6 million in 2011-12.
The shortfall would also be on top of the massive savings councils already have to make following the cuts announced in the four-year comprehensive spending review.
John Hart, leader of Devon County Council, said: "We've managed to freeze council tax for two years now and still increase spending on key services.
"That's been achieved by slimming down our workforce while maintaining frontline jobs, reducing our management costs dramatically and cutting red tape.
"I would like to think we will be able to freeze council tax again next year. But we won't know the level of our Government grant until December and that means we can't set our budget until the New Year.
"The Government is offering a grant of around £3 million if we do freeze council tax and we'll need to see if that is sufficient to enable us to continue providing all the essential services that the people of Devon rely on."
Staffing levels at Devon County Council have dropped by around 1,500 full-time equivalent roles since 2010-11. Last year's budget fell by more than £20 million.
Leader of the Lib-Dems at County Hall and leader of North Devon Council Brian Greenslade supported the freeze last year.
But he said the one per cent offer meant it was "difficult to think how we could sustain our finances in the future".
"I think it will cause us to have a period of mature reflection because one per cent isn't going to go very far," he added. "We will have to have another look at whether we can sustain another freeze grant at such a low level."
Cornwall Council last year kept its share of council tax bills at £1,244. It is on course to make £170 million worth of cuts over four years. A spokesman for the council said: "We are currently considering the issue and it will form part of the budget recommendations which are discussed by cabinet on October 29."
Alex Folkes, deputy leader of the Lib Dems in Cornwall, said the policy announced by Mr Osborne was one of "nanny knows best".
He went on: "That is about as far from localism as it is possible to get. Local councillors who know their local budgets backwards are being usurped from their role by a Chancellor looking to get a cheap clap from his party conference.
"Even those councillors who want to see council tax bills frozen or cut have been speaking out against this authoritarianism."
Announcing the offer, the Government said it had provided grants of around £2 billion over the last two years to help freeze council tax.
It said a freeze in council tax in 2013-14 would represent a real terms cut of around two per cent and a fall of nine per cent in real terms over the past three years.
If councils reject the deal, they will be limited to increases of two per cent or face holding a local referendum.
Alison Seabeck, Labour MP for Plymouth Moorview, said: "Councils are going to be forced into making major cuts to core services. This is not about localism...it is about control by central Government."
