ONE of Scotland's largest councils is embroiled in a stand-off with the Government after revealing plans to ignore a funding deadline amid fears it now risks multi-million pound penalties.

Reigniting the row over local government financing, the leader of North Lanarkshire Council Jim Logue said he would "neither accept nor reject" the cash offer until the Labour-run council had time to consider the implications of the grant, with cuts of £35million on the horizon.

Mr Logue, who said more stand-offs between the Government and other local authorities would emerge soon, accused finance secretary Derek Mackay of undermining his pledge to work with councils by warning them that they had to signal acceptance of the settlement by the January 20.

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In a recent letter to Scotland's 32 council heads, Mr Mackay said: "For those authorities not agreeing, the offer a revised, and inevitably less favourable, offer will be made."

Although the minister does not spell out what this would entail, his predecessor John Swinney previously warned local government that a failure to sign up could cost them funding, in the case of North Lanarkshire around £20m.

But the Government has repeated its position that it has treated councils fairly and that the package comes "without the need to propose any sanctions or impositions".

It also said North Lanarkshire "would see increased spending power of over £8 million in 2017-18".

In a response letter to the minister Mr Logue said the cash settlement councils were being told to sign up to had yet to be fully approved by the Scottish Parliament and it was therefore unfair to expect local government to agree until the ramifications were explored.

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It reads: "This is hardly indicative of the partnership working you cite. In the same way that the Scottish Parliament requires to approve your draft budget, this council still requires to consider the full implications of your offer and the impacts of it.

"Until both this council and the Scottish Parliament have exercised their democratic mandates to set their budgets, I can neither accept nor reject an offer which would see the Scottish Government impose significant cuts to vital services upon which the people of North Lanarkshire rely."

Council funding became one of the biggest rows of last November's draft budget with Mr Mackay claiming councils would receive £240m more in 2017-18.

But local authorities, and later Holyrood’s independent information service, said the funding package would actually be the equivalent of a £327m a real terms cut for council budgets.

Speaking last night, Mr Logue said he would not engage in a game of "blinking first" with the government and expected other councils to follow Lanarkshire in refusing to adhere the deadline to accept the funding deal.

And Mr Logue said the impact of council cuts on sections of society was "highlighting the difference between spin and reality" and insisted Mr Mackay had to spell out what local authorities would be liable for if they did not meet the deadline.

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He added: "I hope Mr Mackay takes his time now. He needs to reflect and use his own experience as a former councillor leader. A starting position would be dialogue, which would certainly be more meaningful than sending out another letter."

A Scottish Government spokeswoman said: "We have been clear from the outset that it wants to work in partnership with local government and in light of this it has provided local authorities with a funding package and a number of joint priorities without the need to propose any sanctions or impositions.

"That was a fundamental principle agreed as an outcome of the negotiations with Cosla. It is now up to each individual local authority to accept the full package of measures and benefits.”