Surrey CC is understood to be considering holding a referendum to increase council tax by 16% as it attempts to grapple with an increasingly desperate financial situation.

Two separate well-placed sources have confirmed that the Conservative authority – which has had to draw down £24.8m of reserves in an attempt to tackle a widening funding gap – has been in talks about tabling the proposal in the new year. 

A spokesman for the council refused to rule out the prospect of a referendum.

He insisted the council's current focus was on convincing ministers of the need to adequately fund essential services, adding: ‘We have been talking to ministers about the unfairness being meted out to the residents of Surrey.

‘We trust that the Government will recognise that continuous annual cuts to Surrey's funding while demand and costs have continued to rise cannot continue.

‘Our attention is on the financial settlement later this month to see what ministers will do to address it.'

The council has reported cuts to learning disability funding of more than £45m, a £24m funding gap for adult social care next year, a £24m gap for special educational needs by 2020 and a £35m gap for the extra school places needed over the next five years.