A Kent council is "coming to a crunch point soon" and the government may send in commissioners to deal with the "turmoil", it has been reported.
A leaked document, seen by the Local Government Chronicle (LGC), highlights Thanet District Council (TDC) as one of three local authorities which are "facing difficulties".
The LGC says senior civil servants have suggested that Michael Gove, the Secretary of State for Levelling Up, Housing & Communities (DLUHC), may intervene.
It comes after Thanet District Council chief executive Madeline Homer left her role with immediate effect last Thursday.
Her departure came after she faced calls to step down last year in the wake of a damning report from auditor Grant Thornton. It revealed a culture of bullying and intimidation at the authority, and spoke of “a serious breakdown in relations” between senior figures.
The council's leader Ash Ashbee called on Mr Gove to intervene in the running of the authority in September last year.
She revealed how TDC had racked up more than £730,000 in legal fees in recent months and overspent by £825,000 on projects, adding further burdens to the £9 million costs it has notched up in the past six years.
The council admitted in summer 2020 that it was on the verge of bankruptcy due to a £3 million black hole brought about by the Covid pandemic - and problems still remain.
Ministers declined Cllr Ashbee's request at the time - but the recently-leaked document suggests Mr Gove could now taken action.
The DLUHC’s memo says it is “preparing advice on the wider issues raised by the council’s external governance review, including on the potential use of best value powers”.
The Local Government Act 1999 imposes a requirement on all councils to deliver "best value". If Mr Gove considers this is not the case, he could trigger a "best value" inspection, which could recommend commissioners are appointed and the power of decision-making is removed from the council.
A Thanet District Council spokesperson told KentOnline: “It would be inappropriate to comment on the findings of a leaked memo.
"We can however confirm that we are on track to approve the appointment of an interim chief executive on Thursday, July 14, and we have developed, and are progressing with, an action plan to implement the Independent Monitoring Officer's recommendations.”
The eight recommendations put forward by the Independent Monitoring Officer were approved at a full council meeting in May.
They include restructuring the senior management team, a mentoring programme for the CEO and directors - and an independent review of the long-delayed plans for a new berth at the Port of Ramsgate, where costs have overrun.
In a statement published last week, Ms Homer said she was excited about pursuing new challenges.
“I have enjoyed being chief executive and have worked collaboratively and positively with elected leaders over those seven years, together achieving positive change in the district," she said.
Union bosses have described Ms Homer's severance package, understood to be £327,000, as "shameful".
The other two councils "facing difficulties" are Northumberland and Liverpool, according to LGC.