All four parties on Liverpool City Council have supported a budget that slashes £91m from its spending next year.
The council said it had suffered the largest cut in government grant in the country, despite the city having some of the worst deprivation.
Local government minister Bob Neill had reneged on a promise to visit Liverpool and inspect the council’s books, it said.
Full council is due to vote on the budget on 2 March. The £91m cut for 2011-12 will be followed by one of £50m in 2012-13 on £400m expenditure after specific grants.
There has been a cut of £57m, equivalent to 45%, in these grants, which reflect deprivation.
Children’s and adult care services have been largely protected, with spending cuts of 1% and 3% respectively.
The main cuts will fall in libraries, leisure, the youth service and highways maintenance.
Liverpool withdrew from the government’s Big Society vanguard programme this month in protest at the impact of the cuts.
Spending on voluntary and community groups will almost halve, from £37m to £19m.
A council statement said: “Savings in this area have been necessary to protect ‘life and death’ essential services to the most vulnerable.”
Leader Joe Anderson (Lab) said: “We have had to make heart-breaking decisions which will cause real pain in our communities.
“That is a direct result of Liverpool being the hardest hit of any council in the reduction of grants, grants previously given in view of the levels of deprivation in the city. Unfortunately the deprivation remains but the money has been removed.”
Opposition leader Warren Bradley (Lib Dem) said: “Liverpool’s political parties were all in agreement over the need to come together to deliver this budget, following substantial changes in the way local government is financed.
“We had to put political differences to one side to ensure we delivered the best deal possible and to minimise the amount of job losses to the people of Liverpool.”
The budget is also supported by the Liberal and Green parties.