Almost £90 million has been slashed from the budgets of Hammersmith and Fulham, Kensington and Chelsea and Westminster Councils for the next two years.

The coalition government announced its long-expected funding cuts yesterday, revealing two of the three west London authorities to be among the ten biggest losers of the capital's 33 boroughs.

Westminster will be hit hardest, losing £38m between now and 2013. Its overall spending power will be cut by 7.2 per cent next year, the ninth biggest fall in London, and five per cent the following year, when only four other boroughs will see a bigger drop.

Hammersmith and Fulham will also have to find savings of 6.6 per cent next year, a bigger fall than all but nine other authorities, and another 4.3 per cent in 2012-13, reducing the amount it has to spend by around £26m.

And Kensington and Chelsea will lose out on around £22m overall as its budget falls by 5.3 per cent next year and 4.3 per cent the following year.

The three councils have already pledged to work together to merge certain departments in order to avoid damage to front line services, but some fear the depth of the cuts will inevitably be felt by residents.

Announcing the figures on Monday, Communities and local government secretary Eric Pickles said: "This is all about how we raise and spend taxpayers' money. Government has been living a credit card lifestyle at taxpayers' expense, and now it's time to pay off some of those bills."

He said funding had been directed at those parts of the country which are most reliant on central government funding, with other areas having to shoulder more of the burden.

And Mr Pickles announced a Localism Bill giving more power to local councils, proposing radical reform to social housing and planning rules and allowing community groups to take over services.

He added: "Whilst resources are tight in the current financial climate, council freedoms are not. Councils now have unprecedented freedoms over how to prioritise their money."

Commenting on the funding cuts, Westminster leader Colin Barrow said previous levels of spending were 'unsustainable', and that the council 'simply cannot afford to do all the things we used to.'

He said: "No one wants to cut front-line services, but if councils pool their resources and expertise and bring the public sector together under one roof people really can get more for less from local government. We see it as an opportunity to transform the way we work."

But Westminster's Labour opposition leader, Paul Dimoldenberg, warned that all services could be hit by falling budgets.

He said: "These cuts are a complete disaster. Every public service will be hit. Streets will be cleaned less, rubbish will pile up for longer, the elderly and disabled will be told to fend for themselves and parents with young children will be told that services will no longer be available. There is no need for such deep and rapid cuts as the deficit can be reduced over a more sensible and manageable time scale."