Changes to the way the Government funds councils could leave education bosses in East Sussex struggling to pay 900 teachers.

The county council warned it might face a £26 million shortfall next year if proposals to alter the way Government cash is distributed are not changed.

Senior councillors said the impact of the loss would be the equivalent of losing 900 teachers, scrapping care for 2,500 elderly people, or abandoning all highway maintenance.

The alternative to cuts would be a 23 per cent increase in council tax bills.

The council's deputy leader Daphne Bagshawe has written to local government minister Nick Raynsford, calling for urgent talks to defuse the potential funding crisis.

The council would be among the biggest losers from the proposed changes, which redirect cash support away from the South-East to the north.

The £26 million figure is a mid-point estimate.

The actual loss could be anything from £4 million to £44 million, depending on how the changes are finalised.

Lib Dem David Tutt told yesterday's meeting of the full council the changes represented a devastating blow for everybody in East Sussex.

He said: "We are not a rich county. We do not have high wages, we have pockets of unemployment which match those of places like Liverpool and Manchester.

"To take money away from East Sussex and give it to other counties is certainly questionable.

"The impact of that magnitude of reduction is almost unimaginable, undoubtedly it will lead to a high council tax."

Labour's Keith Bridger backed a call for cross-party talks with the Government.

He said: "Let's forget party politics, let's think about the people of East Sussex, all the people of East Sussex, those in the poorer areas and those in the richer areas."