The coalition is facing a damaging double-pronged assault from town hall chiefs who feel they are being unfairly punished by cuts in local government spending and rural authorities who claim that the shires are losing out disproportionately under the Government's cuts.
The council leaders of three of England's biggest cities - Newcastle, Liverpool and Sheffield - have warned of increasing social unrest and community tensions in the north, which they say has been hit worse by austerity than the south, in a letter to the Observer.
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