The council has published a new programme of service reviews, market testing exercises and departmental reorganisations which are all designed to help meet the new savings target.

Now for the first time staff are being invited to consider innovative solutions which could include them setting up a staff mutual or social enterprise where they would have a major stake in the running of the service.

Sharing service arrangements with other councils or coming up with a viable cost reduction plan are other options staff are being asked to consider for their individual areas.

The town hall has already identified £80m of savings since 2010 as part of its commitment to reducing the national deficit. However, it now needs to find an additional £20m by 2015.

The opportunity for staff 'on the shop floor' to take over the direct running of their services comes as part of a wider reorganisation of the town hal,l that will see the number of departments reduced from six to four and a corresponding reduction in the number of senior officers.

Council leader Ravi Govindia said: "This is a time of great change in local government, not just here in Wandsworth, but across the country, as all local authorities play their part in helping to tackle Britain's economic problems.

"In Wandsworth we have made great strides over the last three years in bringing our costs down. As new business models emerge there is a real opportunity here for staff to bring forward their own proposals which, alongside more traditional methods such as market testing, can help us achieve our objectives.

"No-one is better placed to identify where efficiencies and innovations can be made than the people who are already doing the job. They know better than anyone what works and what doesn't, what is worth doing and what isn't. That is why we are encouraging them to form mutuals and take control of delivering these services.

"We will also support them if they wish to team up with colleagues in another council to deliver a shared service covering more than one town hall.

"This is the type of model that has just taken over the running of Wandsworth's library service. A social enterprise formed by staff at another London borough successfully bid to win this contract and is on course to deliver an excellent service that offers greater value for money for taxpayers."

Staff who wish to form mutuals will be given advice and support to assist them through the whole process.

If viable staff mutuals are not created then the council will seek to explore other ways of delivering services in partnership with the private sector. The council has a 35-year record of working closely with the private sector to deliver high quality local services at the best value for money prices.

As well as encouraging staff takeovers, the council will be reducing senior staff numbers, cutting back-office costs, sharing services with other councils and reducing the amounts spent on running and maintaining office accommodation.

Councillors on the finance and corporate services overview and scrutiny committee will meet to discuss the proposals on April 24.