Members of the committees would be chosen from among residents and given maximum accountability and control of budgets.
Steve Baggott, a member of the unit set up by the Labour group to review services, said proposals would be adapted to meet legislation.
Where there are restrictions, neighbourhoods could be split into committees and some given independence as charities or companies for functions such as housing management or bidding for regeneration grants. Neighbourhoods could function both as part of the council and independently, depending on the service.
The local Labour Party's May election manifesto states: 'We will support changes to legislation, proposed by the Labour Party nationally, that would allow for the transfer of powers to such neighbourhood bodies. But it is recognised that interim arrangements will have to be introduced.'
The committees will be up and running in a year or 18 months. 'We only get one chance to do this, and we don't want to raise expectations that can't be fulfilled,' said Mr Baggott.