Leading Tory councils are rethinking the provision of local public services, including parks, libraries, and street cleaning, as they confront a severe squeeze on public spending of up to 20 per cent in the years ahead.

Radical cost-cutting proposals by Conservative-controlled councils such as Barnet, Essex, and Hammersmith and Fulham are refuelling the Thatcherite debate about the role of the state and could provide a national blueprint for an incoming Conservative government.