COUNCILS could face even deeper cuts to services under shock plans to make them pay environmental fines imposed by the European Union, the government was warned yesterday.

A row has broken out over smallprint contained in a flagship Bill that will transfer responsibility for financial penalties – for poor air quality rules and low industry recycling – from Whitehall.

Local government leaders immediately warned that areas with the busiest roads and the most industry were likely to fall foul of tightening European Union rules.

That could hit parts of the North-East with a concentration of heavy industrial sites.

Power plants and shipping are blamed for the pollutants linked with respiratory problems and premature deaths.

This week, it was announced that parts of Durham could be made an air quality management area, after high levels of nitrogen dioxide from vehicle exhausts were detected.

Emissions from airports could also incur fines if they exceed acceptable limits.

Durham Tees Valley Airport falls within Darlington’s boundaries.

The switch – part of the Localism Bill, that promises to devolve powers to town halls – comes as Britain braces itself for EU fines expected to reach £1bn, including £300m for poor air quality.

Local councils are already facing cuts of 28 per cent to their budgets over four years, with some of the steepest reductions in the North-East.

The Local Government Association (LGA), urged Communities Secretary Eric Pickles to think again before implementing what it branded “unfair, unworkable, dangerous and unconstitutional legislation”.

It said decisions about the locations of motorways and airports were not made by local councils – and targets were agreed by Whitehall.

Lady Eaton, the LGA’s Conservative chairwoman, said: “If fines are levied, councils will have no choice but to either cut services or pass the cost on to residents.

“Changing the goalposts now to make councils liable for fines is unfair to them and unfair to local residents who may have to foot the bill.”

The LGA said a threatened £300m air quality fine was enough to add £15 to the average annual council tax bill – or pay for 12 million hours of home care for the elderly.

But Local Government Minister Bob Neill described the £1bn estimate as fantasy and blamed Labour for the fines, which flowed from signing up to the Lisbon treaty.

Mr Neill said councils would only be punished where they were at fault. “Localism cuts both ways – more power, but more responsibility,” he said.

Last year, a report by a committee of MPs blamed air pollution for the early deaths of up to 50,000 people every year, but said local authorities lacked the muscle to act on the problem.