Oxfordshire County Council last night sounded a warning of further job cuts as it axed a quarter of its managers.

The job losses are in addition to the 500 posts County Hall cut last year, as part of a bid to save £100m.

But, far from ruling out further job cuts affecting frontline workers, the council gave a strong indication of more pain to come.

The latest round of cuts will potentially affect every service, such as education, roads and social services.

Council leader Keith Mitchell said: “These kinds of decisions are not easy to make and we have more difficult decisions ahead, such as how we make 2010-11 savings of £10.8m and how we make savings in future years following the Government’s Comprehensive Spending Review.”

The council is the county’s largest employer and it briefed its entire 22,000 workforce on the proposed cuts yesterday afternoon.

Mark Fysh, the county’s Unison representative, told the Oxford Mail he expected hundreds of staff to be axed.

He said: “Jobs will go in the council from top to bottom. This is the beginning of the dismantling of local government.”

Mr Fysh said union talks would be held on a national level and strike action was a possibility. He believed critical services, such as care for the elderly, would also be affected.

“The services people need will go and people will get ill and people will die,” he said. “It will make a difference to people’s lives and they will not know what has hit them.”

The news was broken to staff days after they were told of a two-year pay freeze and Mr Fysh said morale had “dropped through the floor”, adding: “We feel we are being made scapegoats for the bankers’ mess.”

The council, like many others, faces a perilous financial future.

The Government has already announced a £10.8m cut in the council’s budget this financial year and a decision on savings is due in July.

This week’s emergency budget detailed cuts of at least 25 per cent to Government departments – including those that support local government – and all councils are braced for further misery in the autumn.

Mr Mitchell said: “We have been honest and decisive from the very start about how the parlous state of national finances would impact on local government.

“We have benefited hugely from early planning and action we took last year, as events have shown.

“These next changes we now propose will mean some management staff lose their jobs and that is always difficult for all concerned.”

But he said the austerity measures offered a chance for change.

He added: “We want to be a lean, nimble, responsive and cohesive organisation in which as much of taxpayers’ money as possible is spent on services for local people.”