Councils are looking at the budgets in the coming weeks

Local Government Minister Brian Gibbons admitted the average 2.3% rise in grants across Wales was "tight" but called it a "realistic deal".

Councils warned of higher council taxes and pressures on services ranging from education to social services.

Meetings will be held over the coming weeks to examine spending plans.

Welsh Local Government Association (WLGA) education spokesman John Davies, a Pembrokeshire councillor, said education authorities faced "cuts in service, redundancies and school closures" without extra cash or council tax rises.

Anglesey council leader Gareth Winston Roberts said it was a "cheek" of the assembly government to call it a fair settlement.

"Once again they have ignored the front-line services to focus on pet projects far away from Anglesey.

"It seems there is no extra cash for front line services, but millions available to bail out the [Wales] Millennium Centre in Cardiff."

Anglesey finance portfolio holder Hywel Eifion Jones said it was a "disastrous" settlement and he would be asking for a meeting with Dr Gibbons.

Powys Council said it faced a hole in its budget and could not rule out job losses, while its council tax was likely to rise by three times the current inflation rate of about 2%.

A council spokesman said: "We are extremely disappointed with this settlement, which will affect the services we provide for the people of Powys."

Monmouthshire finance cabinet member Phil Murphy said it was the worst settlement in its history.

"It is difficult to conclude other than the assembly is prepared to sacrifice vital local services in favour of its own political agenda," he said.

Monmouthshire cabinet member for education Peter Fox added: "I am really concerned for our schools given the dismal settlement for next year.

"Looking at the figures we have a number of schools where the 2.1% increase means that meeting statutory levels of service is likely to result in an irretrievable financial position".

Neath and Port Talbot Council leader Derek Vaughan called the 2.1% rise in grant "abysmal".

"We are now in a desperate situation," he said. "The settlement is a lot lower than we anticipated. It fails to fund core council services, including schools."

The Conservatives said north Wales councils bore the brunt, singling out 1.1% rises for Anglesey and Conwy as "totally unacceptable."

In a joint statement, Clwyd West AM Darren Millar and North Wales AMs Brynle Williams and Mark Isherwood said: "How are these councils expected to balance the books when they have received such a pathetic revenue increase?"

"North Wales councils now face the stark decision of cutting services or hiking up council tax yet again."

But Plaid AM Dai Lloyd said while a review of the funding formula from Westminster was needed, he accused Liberal Democrats and Conservatives of "grandstanding politics" over public spending.

"To simply call for more money for all budgets is not responsible opposition. We would all like to have more money available."

He said in calling for more money for education and local government, the Conservatives also needed to tell the people of Wales where they would find the money - "cutting the health budget, social services, regeneration or the arts?" he asked.

Dr Gibbons said it was a "realistic provisional settlement for local government in what is a tight three-year budget."

He added: "In common with the rest of the public sector in Wales, local government is expected to make efficiency savings on their expenditure."