Labour leaders have written a desperate plea to the communities secretary calling for him to allow Northamptonshire County Council's budget to stand.
Earlier this week the authority was told its plans to strip another £30 million form next year's budget were "unlawful" by external auditors.
KPMG said the council's plans to use some £40.9 million of so-called "capital receipts" - money generated by selling off land and property - could not be used to prop up the day-to-day running of services due to local government laws.
Most of that fund would come from selling off the £53 million One Angel Square headquarters.
But Labour group leader at County Hall, Councillor Bob Scott (Lab, Lloyds) has urged the Government to be flexible.
In a letter to communities secretary Sajid Javid, he wrote: "You and your civil servants at the DCLG (Department for Communities and Local Government) have the ability and expertise to unlock the current dilemma being played out in Northamptonshire.
"Only Government can provide the flexibility within the guidelines to allow for a reasonable period of years in which to stabilise the current financial position for Northamptonshire."
The Conservative administration held a crunch meeting on Thursday to try and hammer out ways of making their budget comply with Government laws.
The authority now has until Thursday, February 28 to come up with a legal budget.
The complicated rules mean capital receipts can only be used to fund "transformational projects".
One option open to the council is to try and raise council tax over the statutory four per cent - but this would need to be approved by a referendum.
"The use of a referendum to be able to increase council tax is an obvious tool which can be used," said Councillor Scott. "But time does not allow that to be done this year before the deadline."
Sajid Javid's opposite number, shadow communities secretary Andrew Glynne, believes the Government must allow the budget to go through.
He said: "Ultimately it is going to take intervention from the secretary of state.
"I will be joining up with the parliamentary candidates in Northamptonshire to make sure Sajid Javid intervenes and provides the council with the necessary powers to set a legal budget.
"The fundamental problems in Northamptonshire are not going to take internal restructuring - it will take proper financial management
"But going forward the council needs medium-term financial plans that is sustainable.
"You can only spend your reserves and once they ave depleted you can only spend what is in your bank balance."