The Local Government Secretary Eric Pickles enraged opposition MPs when he described an average cut of 1.7% in total spending power for councils in 2013/14 as a "bargain."
Mr Pickles admitted that some councils would lose up to 8.8% next year.
Mr Pickles insisted that the settlement was fair to Northern councils.
He went on to quote figures showing Newcastle in receipt of grants /spending power of £2522 per head compared to £1814 in Wokingham.
But Labour's Shadow minister Hilary Benn said figures from the Audit Commission clearly showed that councils in most deprived areas were taking a disproportionate hit from those cuts already announced.