Research by campaign group The Taxpayers' Alliance shows that the authority's pensions deficit has rocketed to £190.3m for 2008 to 2009 – an increase of almost 78 per cent from the previous year.

The £83m rise in shortfall relates to the amount of money which is needed to pay out in pensions to council employees, minus the amount of money set aside to pay for them.

Wigan's pension pot is part of the Greater Manchester fund which is administered by the Association for Greater Manchester Authorities (AGMA).

Campaigners say the Local Government Pension Scheme (LGPS) is placing an unsustainable burden on taxpayers and on council budgets.

In February, the alliance revealed that LGPS employer pension contributions alone were costing the equivalent of £1 in every £5 of council tax.

The group's financial experts believe local authorities should freeze pension entitlement at their current level and increase employees' contributions to eight per cent of their salary.

Councils across the UK had a combined pension deficit of £53bn in 2008/09, an increase of 27 per cent from the previous year and Wigan is not alone among its neighbours either.

Neighbouring Bolton Council has a £174m black hole, with Manchester facing a pensions deficit of almost £389m.

John O'Connell, Policy Analyst at the Taxpayers' Alliance said: "Swift and firm reforms are essential to stop this deficit escalating further out of control in the long-term, and lighten the load on council budgets in the short-term."

But Jo Miller, Deputy Chief Executive of the Local Government Association, said: "Council pension funds are carefully managed in the long term to cope with ups and downs in the markets.

"It is extraordinary that the Taxpayers' Alliance is attacking the pensions that lollipop ladies, bin men and librarians have paid into every working day. The average pension paid out under the scheme is just £4,044 a year to people, many of whom have toiled all their working lives."

Dr David Smith, executive director of business support services, said: "The increase reflects the recent falls in the stock market investments rather than an increase in pension benefits and relates to 2008/9.

"The amount is a measure of a long term liability which has fluctuated over time. We have reflected the increased cost of pensions, which include teachers as well as council employees, in our recent budget plans. Employee contributions have recently increased for higher earners and the Government and local authorities are looking further at a fair share of the increased costs of pensions between employer and employee."