This is one of three models which have been drawn up by a Labour adviser for inclusion in the white paper on local democracy now expected to be published towards the end of July or in September.
The publication of the white paper has been delayed by rows between prime minister Tony Blair's office and officials at the Department of the Environment, Transport and the Regions. Number 10 is keen to force change on councils determined to stick to one-party rule, while the DETR is more fearful of judicial review challenges to ill-prepared reforms.
Ministers also wanted to avoid publishing the white paper at next week's Local Government Association conference where it would receive a frosty response from many of the 22,504 councillors in England and Wales.
Each plan will be required to pass tests of accountability which were sketched out in the failed Hunt Bill, but are still the subject of argument within government.
If a council's plans are not radical enough, the white paper will suggest giving ministers powers to impose one of three models which have been drawn up by Gerry Stoker, professor of politics at Strathclyde University and a government adviser on local democratic renewal.
Two of the three models are based on US local government. Directly elected mayors would effectively turn chief executives into backroom advisers. However, the option of city managers would give the top official far greater powers over the management of the council's finances and staff.
The third model is the cabinet system, whereby a small group of councillors take most executive decisions themselves subject to scrutiny from backbench councillors from their own and opposition parties.
This model is favoured by most councils prepared to change the committee system. However, ministers are concerned cabinets might simply reinforce the power of old Labour groups on many of Britain's councils. Cabinets would also fail to reinforce the position of council leaders, one of the prime aims of ministers who regard the current system of corporate responsibility as less accountable and less visible than directly elected mayors.
The paper will also contain a cautious loosening of central controls over council finances, provisions to replace CCT with best value and new ethical regulations which will be policed by regional panels rather than chosen by councils.
The paper may also contain proposals to establish 'trust' or 'beacon' councils which will gain special freedoms in return for better services and democratic reforms.