Five east Kent councils are in talks over whether to join forces to create a new "super council" in what could be the most far-reaching shake-up of the local government map for decades.
The discussions about a merger are at an early stage and a number of options are being explored, say sources.
The councils involved are Ashford, Canterbury, Dover, Shepway and Thanet.
The talks have been triggered by the government's proposals to devolve more powers to councils.
A number of meetings involving council leaders have already taken place and will continue over the next few months, sources say.
Options under discussion include creating a new unitary authority – effectively breaking away from the existing two-tier set-up that has existed in Kent for more than 100 years.
As a unitary, all services would be provided by a single council rather than split between the county council and the existing districts.
"If Medway can make a go of it as a unitary, then so can we" - Roger Gale MP
Council leaders are also examining the option of creating a single super district under which a new council covering the five areas would provide the same services as now but could be given additional powers to commission health services and drive the area’s economic regeneration.
Any new arrangements would have to be sanctioned by the government, which is inviting proposals from councils to work in different ways.
It could herald the most significant reorganisation of local government in Kent since the creation of a new unitary authority in Medway in 1996.
Council chiefs believe that while there would be up-front costs initially, these would eventually be recouped through savings for the taxpayer.
Cllr Simon Cook, the leader of Canterbury City Council, said: "There are very few things that are off the table. What is key is working out what would be better for residents.
"Can we jointly commission health services, for example? The government is making it clear that this is not about a political power-grab but what would work best for residents."
Cllr Cook said he would be very surprised if there was not a formal proposal by the end of the year.
"There is a real desire to do something," he said.
"There are a lot of options and the key question is 'What would work best?'."
But he said the councils would want the government to advise whether it was on the right track.
"The worst thing to do would be to go for it and get it wrong," he said.
Some of the councils have already moved to shared services under joint agreements, notably for rubbish collection and housing.
One council leader, who did not wish to be named, said: "This is serious stuff.
"We genuinely want to make it work. The fact is that if we don't do something now, some of us won't be financially viable by 2019."
The call for a shake-up has been endorsed by North Thanet MP Sir Roger Gale.
He said: "It is already the case that, to achieve economies of scale, a number of services are shared between Shepway, Dover, Thanet and Canterbury and the time has arguably come when we should accept that if Medway can make a go of it as a unitary, then so can we."