Additional money comes after Tory MPs write to PM demanding funds to prevent councils making cuts to services in election year

Councils in England are to be handed an extra £500m funding boost amid the worsening financial crisis hitting town halls across the country, after Tory MPs had threatened Rishi Sunak with a fresh Commons rebellion.

The additional money is expected to be added to the annual local government financial settlement, sources have told the Guardian, with a statement expected from the levelling up secretary, Michael Gove, as early as Wednesday afternoon.

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