Newcastle City Councils anticipates £90m budget cuts by 2016 could force an organisational restructure resulting in up to 1,300 job losses.

Affirming that it would continue to lobby government for a fairer financial settlement, Newcastle has launched budget consultations on plans to reduce its budget by over a third in three years time.

By early 2013, 730 jobs could already be lost at the town hall, with compulsory redundancies avoided wherever possible.

Further cost saving measures include the closing down or realignment of libraries, and cultural, leisure and sports facilities, as many are transferred to community control.

Plans for could see £418m invested in the local economy, housing and new services, alongside funding for new technology and suitable housing to alleviate the rising costs of social care for the vulnerable.

However, Newcastle confirms that more serious cuts to eligibility for social care may have to be made by 2016.

If proposals are approved, services for young people may shift partly to community control while work is undertaken to reduce the number of children entering the care system through early intervention.

In a letter to prime minister David Cameron, council leader Nick Forbes argued that the regional disparities of local government funding cuts were ‘grossly unfair' and potentially ‘counterproductive'.

Speaking on Newcastle's latest budget proposals, Forbes said: ‘We don't want to cut services any more than those that are fighting to save them, but we are in this position because of the massive cuts in government funding.

‘In the past week I've had thousands of e-mails and scores of tweets from people unhappy about our proposals to close libraries. We don't want to close them but given our statutory duties to care for older people, people with disabilities and learning difficulties and looked after children we can no longer fund all of these services together and tough decisions must be taken so we can set a legal budget.'

Alongside representatives from Sheffield and Liverpool, Forbes was among council leaders who recently wrote to the Government warning that current levels of austerity could result in ‘the break up of social society'.