He added: “We are determined to continue delivering quality services for the people of Liverpool and are looking at a whole series of measures to reduce costs and improve value for money through better efficiency.

“Local government is facing a challenging government settlement as a result of the current economic climate, and changes in the size and composition of the workforce are inevitable.

“A proportion of any reduction will be through natural wastage as employees retire, or not replacing staff who leave.

“We will work closely with staff and trade unions to make sure any job losses are handled as sensitively as possible.

“As part of our normal business, we are reviewing the terms and conditions of staff contracts in consultation with employees and their representatives as part of a harmonisation programme.”

Deputy Labour leader Paul Brant said the current £11m budget gap was “deeply worrying”.

“It is clear that major and significant cuts are now on the agenda for the public next year.

“This is before the £120m additional gap over the next five years kicks in.

“It is a sign of financial failure that we are facing this situation.”