COUNTY council services are set for unprecedented cuts of up to £142 million after bosses revealed a massive financial black hole.

The worst-case scenario figures represents 20 per cent of Lancashire’s budget.

The best case would still see £79million of spending slashed.

The shocking deficit was revealed in a council report which says the cuts are needed to balance the books over the next four years.

County Council leader Geoff Driver admitted ‘reductions in some services’ would be inevitable.

Unions have warned of heavy job losses.

Tory Coun Driver pledged to protect frontline spending on roads, and looking after vulnerable children and adults. All other areas are being looked at.

Critics have warned of “dire consequences” and “serious cutbacks” in services.

Coun Driver, who won control of the county council in June after almost 30 years of Labour control, said no decisions had yet been made on where the axe would fall in the future years.

But he admitted: “I am not going to try and pretend we can find this kind of money just through efficiency savings.”

Except in Blackburn with Darwen - where bosses will face their own budget headache from 2011/12 - the county council controls services including highways, libraries and museums, social services and waste disposal.

The Tories will now have to decide which areas of spending they want to protect and where services could be cut.

Their first task will be to find £16million in savings by February in order to achieve a zero per cent council tax increase in 2010/11, a key election pledge by the Tories, which was re-iterated by leader David Cameron on campaigning visits to Lancashire.

Labour leader Jennifer Mein said: “Going for a zero per cent council tax increase was a vote winner, and they are paying the price.

“They will live to regret it.”

But Coun Driver said: “We are delivering what we promised, and what we believe the people of Lancashire want in the middle of a recession.”

The current three-year Government grant cycle runs out in 2011, so council bosses have no idea how much they will be given after that date.

But with public spending squeezes brought on by recession and an increase in government borrowing, it is expected to be considerably less than the 5.3per cent increase the county was given last time around.

A report to be presented to the ruling cabinet next week presents four potential outcomes depending on grants ranging from a two per cent grant increase - which would mean a deficit of £79million - to a five per cent cut, leading to a potential £142million black hole.

The predictions assume a 2.5per cent increase in council tax every year from 2011/12. The Conservatives have promised to match this with funding to freeze residents’ bills if they win the next general election.

As well as Government funding fears, the £2billion private finance initiative contract for waste disposal will hit council tax bills in 2011, adding £42million to the budget and leading to a sudden spike in the savings needed.

Children’s services are also experiencing financial pressures, because of an increase in children being referred to social workers following the Baby P tragedy.

Burnley Council leader Gordon Birtwistle said: “It’s obviously going to be a dire situation for the people of Lancashire.

“We are going to have serious cutbacks in services delivered from County Hall.”

Coun Driver would not confirm whether jobs would be lost as part of the cost-saving drive, insisting it was too early to say.

But Unison rep Carol Lukey said: “The amounts being talked about and how they are going to save the money are a concern.

“I don’t see how they can achieve it without an impact on services.

"Everyone is worried. Nobody is under the illusion that local government is a job for life any more.”