Nottingham City Council considering effective bankruptcy

Mr Mellen said the council was “working hard” to balance the budget, but said the move was an option if the council needed to take further measures to reduce spending.

“We do need to take measures, and we’re already doing so, to do what we can to balance that budget in extremely trying times,” he said.

“At the end of the day, you can’t cut things beyond the bone or the city stops working in the way that it should be.”

Mr Mellen said local authorities were “not properly funded” and blamed the government for taking away £100m from Nottingham City Council every year since 2010.

Expecting councils to deal with increasing costs and pressures was “unrealistic”, he added.

Mr Mellen said financial “mistakes” such as the failed Robin Hood Energy project were “small in comparison to the year-on-year reduction” of funding.

He confirmed the council would continue to pay staff but would have to stop recruiting for all non-urgent roles.

The council will also look at the potential sale of any asset worth more than £1m.

Documents show the Labour-run authority has so far managed to bring an in-year deficit of £26m down to just over £23m.

It had previously stood at £57m, the Local Democracy Reporting Service said.