Cornwall Council has been accused of letting its budget spiral out of control after a £4million overspend was forecast just two months into the financial year.

Liberal Democrats on the authority say the figures, due to be debated in next week's cabinet meeting, have raised serious questions over the Conservative-led council's ability to marshal its money.

The council denies the claim, saying that identifying the overspend early in the year was evidence of good book-keeping.

However, Alex Folkes, Liberal Democrat Councillor for Launceston Central, said: "Just because they know they're in a hole doesn't mean to say they're not in a hole."

According to papers being set before the cabinet next week, the major part of the overspend has been racked up in three departments, with a projected deficit of £2.3 million in the adult care and support budget, £600,000 in the housing service and £750,000 in Customer First, which oversees issues like the library service, leisure and museums.

The documents also show that the council is failing to meet some of it key targets for service delivery, such as in adult care and support, where it has not hit any of its five key targets.

With the Government set to draw up another Budget later in the year and austere times ahead, Mr Folkes said the council needed to take action.

"It is very worrying that just two months into the financial year, the Conservative- led council is already on course to overspend by almost £4 million.

"If they cannot keep control of the current budget, how can they be trusted to make the cuts imposed by central government budget reductions without crippling frontline services."

But the allegation was firmly rejected by Michael Crich, director of resources at Cornwall Council.

He said pressure points identified early in the financial year would be sorted – as they were every year.

"The suggestion that the council's budget is out of control is obviously a clear misunderstanding of the budget report.

"The council has an extremely robust system in place to monitor its spending which includes monthly reports to the cabinet.

"These are specifically designed to pick up pressures on its budget at a very early stage and ensure that immediate action is taken to address these issues to prevent any overspends.

"Rather than the budget being out of control the fact that we have picked up these pressures at such an early stage clearly demonstrates that the council is controlling its finances very tightly."