Leaders of Telford & Wrekin Council are threatening to sue opponents for controversially claiming that they broke the law during the public consultation over £25 million budget cuts.

Councillor Keith Austin, head of the opposition Labour group, accused the Tory-led council of failing to ask most staff and service users for their views. He also claimed its decisions could “bankrupt” the authority.

This prompted angry responses from council leaders at last night’s cabinet meeting at Telford Civic Offices.

Councillor Sean Kelly, cabinet member for efficient, community-focused council, said: “Those are very serious accusations you make and all I can say is that you had better have a very good solicitor.

“This is a very personal attack on me and my officers, saying that we have illegally acted, attacking me and the professionals.

“And can you please tell us from the figures in our report in front of you how exactly you see this authority being bankrupted?”

Council leader Andrew Eade criticised Councillor Austin for last night handing a letter to chief finance officers querying the legality of the consultation process.

Councillor Eade said: “You are casting doubt on our chief financial officer’s statement, included in the report if you had read it, that these budgets are robust and legal.

“You have made some very serious charges against this council, its officers and members. I’m going to give you this one opportunity to withdraw the accusation of illegality.”

Councillor Austin refused to back down or to add to his statements before seeking legal advice, saying he was being held in a “kangaroo court”.

He said earlier: “There has been a failure by this administration to consult service users and staff on the majority of the cuts. On top of that they have refused to carry out equality impact statements. These are both legal requirements, so this budget is unlawful.”

He added the combination of the multi-million pound plans to redevelop the Civic Offices and the cost of funding redundancies “risks bankrupting” the authority.

The cabinet approved its budget, which will tackle a £20 million funding shortfall in 2011/12 as part of plans to cut £25 million from spending by 2014. However, council tax will be frozen.

Unison branch secretary Jonathan Sedgebeer was granted permission to outline an alternative budget, which called for cuts to be spread over a longer timescale.

Members agreed to discuss the idea to delay “single status” equal pay reforms in a bid to retain more staff.