Liverpool Town Hall _300

Also facing the immediate axe is the regional spatial strategy (RSS), the ambitious blueprint to deliver infrastructure, housing, transport and business investment over the next decade.

Labour has warned that key projects – including the £431m Second Mersey Crossing, the Liverpool-Manchester rail electrification and expansion plans at the Port of Liverpool and John Lennon Airport – will grind to a halt.

The DCLG source said: “We expect the new Secretary of State will move forward very quickly on scrapping the regional tier of government, which means housing targets and the spatial strategies.”

Mr Pickles is also expected to speed up a crackdown on so-called town hall “fat cats” after attacking local authority figures “paid like football managers”.

Every town hall would be forced to publish online every item of spending above £500 – to make them “think hard about how they spend our hard-earned money”.

And Lib-Dem MPs in the new coalition will face a dilemma when asked to back legislation to strip councils of powers to control the opening of new schools.