Council leader Warren Bradley said: “Officers bring forward ideas to save money every year and offer them to all political groups for consideration, but it does not mean we will approve them.
“This situation is a reflection of the fact we got a poor government settlement, well under the national average.
“Last week we came up with other options which we have given to the officers to work through.”
But Labour opposition leader Joe Anderson said: “This is a major disaster for the city.
“The council is in a financial mess and the Lib Dems are paying the price for not raising council tax a few years ago, when we suggested small increases.
“It is rich for them to criticise what happened in the 1980s when this is on the same scale.”