A Labour-dominated parliamentary committee has urged ministers to accept the Local Government Association's case that emergency planning is underfunded.
The joint committee of MPs and peers that examined the draft Civil Contingencies Bill - designed to combat terrorist threats - also criticised confusion over the roles of different local government tiers.
The LGA argued that the £19m civil defence grant meets only slightly more than half the cost of emergency planning, with councils footing the rest of the bill.
Successive cuts mean the grant is £5.5m less than in 1991 and has suffered a 50% cut in real terms, the LGA said.
The committee said: 'The LGA figures have not been challenged by the government, and we consider they provide a reasonable initial indication of costs.
The committee said the government appears to believe it is for 'others to disprove its belief that current funding levels are sufficient'.
It also called for temporary ring-fencing of the civil defence grant to ensure councils do not divert it to other activities. Ministers had argued that removing the ring-fence would move emergency planning into the mainstream of councils' thinking.
The committee attacked the draft bill for putting shire district and county councils in the same category of responsibility, while simultaneously stating that counties would 'take full responsibility'.
'This has led to confusion,' it noted.
Members also questioned the bill's removal of fire and civil defence authorities from civil protection duties in emergencies.
They said no justification was offered by ministers beyond the observation that 'joint working is not always appropriate', and called for retention of successful arrangements involving these authorities.