LABOUR-run Durham County Council is poised to axe 1,600 jobs, its leader revealed his week.

Faced with £100m of savings over four years, it is to ask its entire 10,041-strong directly-employed workforce for expressions of interest in early retirement or voluntary redundancy.

Services across the board are at risk, with everything not required by law placed under review.

The council leader, Coun Simon Henig, said: "It's the hardest thing I've ever had to do."

The announcement came hours after the Coalition cut the authority's "spending power" for next year by 35.9m.

Over £11m of Durham County Council's grant has been withheld to protect services in other local authority areas mostly in the South.

The Government's financial damping system which sets a minimum and maximum grant level for every council unduly penalises authorities in hard-hit areas.

In addition, grants for job creation and help to poverty-stricken areas have also been slashed by £25m Coun Henig said that when all grants were taken into account, the council faced a year-on-year funding cut of 15 per cent; and there was "clear unfairness" across the country, with Surrey County Council losing just 0.3 per cent.

"It's Robin Hood in reverse: targeting the poor and giving to the wealthier areas," he said. "It's the worst cuts in the recent history of local government."

He added: Sadly, there is no light at the end of the tunnel. This isn't a one off. We are expecting the cuts to just keep coming.

The council hopes to save about £50m from management, support services, efficiency measures and a fees and income review. But a further £50m will have to come from public services. Decisions on what to cut will be taken in February.

But, with Coun Henig saying a council tax increase was "extremely unlikely", funding for everything from libraries, museums and theatres to youth, sport and leisure centres is being reconsidered.

Among 140 proposals are: Reducing councillors' local budgets; Reviewing support for community buildings; Reducing the number of issues of the council newsletter, Durham County News; Reviewing the operating costs of the Gala Theatre, in Durham City, and Rationalising bus services.

Coun Henig said: "We feel there's no option but to put on the table almost everything that's not a statutory function of this council. We don't have a magic wand. We can't reverse the loss of £100m."

He said Co Durham would still have more facilities than many other areas, but warned of a "thinning out", with some residents having to travel further to their local library or leisure centre.

Terry Scarr, regional organiser for the GMB union, blamed the cuts on the Tory Government and said the council had guaranteed it would try to make them as painless as possible, but added: "We will be looking to challenge the cuts if we think they've been unfairly selected."

Coun Henig singled out the Liberal Democrats for criticism, saying: "I would expect nothing less from the Conservatives. But it's very surprising to find the Lib Dems going along with it. It makes you wonder what they're doing in the Coalition.

"I believe these cuts are ideological. We are having to implement a huge-scale reduction in services that have been built up over not just years, but decades."

However, Coun Nigel Martin, leader of the council's Lib Dems, said his party's ministers had won real positives, including the pupil premium. The Coalition was dealing with a national financial mess left by Labour.

He said it would be very sad if there were compulsory redundancies but the council had to focus on delivering services efficiently and deal with over-staffing. He said there could be considerable progress through voluntary redundancies.

"It isn't as if they're going to stop 1,600 jobs tomorrow. We've got four years to deal with these problems," he said.

Council chiefs stressed they would do everything possible to limit compulsory redundancies and the impact of the cuts, including offering re-training, re-deployment, support and counselling.

Consultation with residents and area action partnerships on what should be cut has already begun.

In Darlington, council leader John Williams said the true cut in Government support to there borough was likely to be as much as 11.65 per cent.

Cuts of this scale will seriously undermine council services.

Middlesbrough mayor Ray Mallon said the cuts were too savage and too deep and threatened to put the borough back a generation.

North Yorkshire County Council said its funding settlement was also worse than anticipated, and had left the authority with a shortfall in excess of £30m over the next 15 months.

Clare Williams, Unison's North-East regional convenor, said the settlement heralded the start of biggest shake up of local government since 1945.

She added: This will have huge implications for our communities and the fabric of our society in terms of delivery of public services.

The cuts will leave councils in the region with 18m less to spend on local transport in the next financial year.

In 2009-10, councils in the North-East shared more than £82m in grants and in North Yorkshire the county council got just under £32m.

However, in 2010-11 that will be slashed by 18m to 64m in the North-East, while North Yorkshires allocation will be cut to £29m.

In 2012-13, 65m will be allocated to North-East councils and 28m to North Yorkshire.

The funding includes money for smaller local transport projects those with a value under 5m such as road junction improvements and the introduction of new bus lanes.

A separate funding stream is also made available for highways and roads maintenance, and the DfT said it had allocated more than £3bn over the next four years for local highways maintenance, which it said continued to be prioritised, reflecting the economic and social importance to local communities.

Douglas Kell, North-East director of the Civil Engineering Contractors Association, said transport spending was likely to be squeezed when set against other areas such as social care.