Leicester City Council has approved plans to cut millions of pounds from its spending in the next two years.
Mayor Sir Peter Soulsby said his authority's ability to provide services had been "seriously undermined by the harshest cuts in Government grants in living memory".
City councillors met on Wednesday to decide budget plans that will mean £3 million being cut from the council's £288 million running costs next year, followed by a further £6 million the year after.
Sir Peter said: "It's not just bad news for service users and those who provide those services, it's bad news for the Leicester economy.
"It is clear there is worse to come.
"We have sought to mitigate, where possible, the impact of these proposals."
As the Labour majority approved the budget – which is to see more than 100 council jobs scrapped next year – there were cries of shame from anti-cuts protesters in the council chamber's public gallery.
They had earlier gathered outside Leicester Town Hall to protest against the cuts and lobby members, particularly over proposed £2.2 million cuts to homelessness budgets and the scrapping of 200 hostel beds.
This proposal had already been taken off the agenda to allow the results of a recent consultation to be considered.
The campaigners, including Unison union members, accused Labour councillors of failing to stand up to cuts imposed by the Tory and Liberal Democrat Government.
At one point, about 50 chanting demonstrators in Town Hall Square pushed past council staff to get into the building foyer for a loud but peaceful protest.
They were removed from the building by about 15 police officers.
Inside the meeting, Labour councillors queued up to denounce the Government, calling it "wretched" and "uncaring".
Sole Liberal Democrat councillor Nigel Porter was involved in angry exchanges with Labour members who said his party was responsible for national policies affecting the city's most vulnerable.
Coun Porter accused Sir Peter and deputy city mayor Rory Palmer of accepting large pay packets while cutting services.
He said: "Most people think it's disgusting that Sir Peter and his number two are cashing in. Sir Peter's number two will have pocketed nearly £200,000 over the four years of this council.
"If they cared about the homeless, they would stop buying old post offices and empty factories.
"They would stop wasting money on a £4 million patio (Jubilee Square) so Sir Peter can have his bit of immortality."
Coun Porter was branded "a grotesque parody of an opposition councillor" by Labour assistant mayor Andy Connelly.
Sir Peter described Coun Porter's comments as silliness and Coun Palmer said the people of Leicester expected politics to be carried out with decency and decorum.
Sir Peter said: "We are heavily dependent on Government funding.
" It's a fact that when the Government makes cuts we are the ones left having to explain them and implement them.
"The scale of that is unprecedented and the savagery is appalling.
"These decisions are not good ones. There are no good decisions, but we must make the best of the very serious situation we are in."
From April, council tax in Leicester will rise by 1.97 per cent.
A 4.1 per cent rise in council tenants' rents had been proposed but that was reduced to a 3.4 per cent increase.
Tory-run Leicestershire County Council has also passed a budget with heavy cuts.
Senior Conservatives said they needed to save £79 million over the next four years but are still unsure where £30 million of those cuts will come from.
At a meeting on Wednesday, Conservative leader Coun Nick Rushton said: "We face unprecedented financial changes but I'm proud of what this group has done.
"No matter who wins in May, no matter who comes back in charge, the money will stay the same.
"We've had to look and think about things we've never had to think about before.
"It needs us all to work together to achieve this."
The Lib Dems proposed two amendments to the budget – £50,000 to be set aside to explore installing solar panels on council buildings and adding more than £1 million to the highway maintenance budget for repairs.
Neither was accepted.
Liberal Democrat leader Simon Galton criticised the council for having £99 million in reserves.
He accepted some reserves were needed, but said: "We've got to start thinking about how we can use reserves to protect services.
"If there is going to be a cross-party discussion there has to be a willingness to look at other ways this council can raise money to use in order to protect front-line services.
"That is the bit we are not feeling satisfied about."
