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Wandsworth Council could raise council tax by £958 for a Band D property, an increase of 94%, under proposals described as "outrageous".
The Conservative-led London borough said the rise was needed unless the government reconsidered cuts to its funding. Under changes, announced earlier this year, the council said it stood to lose £84m a year in funding by the end of the next three years.
Plans to increase the council tax were heard at an extraordinary council meeting on Tuesday but a final decision will not be made until early next year.
The Ministry of Housing, Communities and Local Government (MHCLG) said the changes were needed to reform the "outdated" council funding system.
Wandsworth has a long history of setting low council tax. While an increasing number of London boroughs have seen council tax on a Band D property rise above the £2,000 mark, in Wandsworth, council tax on an average Band D property is currently £1,020.35.
Of that figure £509.84 is the part that the council sets and £510.51 of that is the Greater London Authority (GLA) precept set by the mayor of London.
Wandsworth Council, along with Westminster City Council, Richmond Council and the Royal Borough of Kensington & Chelsea, is currently consulting on plans to use a piece of legislation called the Sustainable Communities Act to try to challenge the government proposals that would see its central government funding reduced.
Changes to the funding formula for councils under the Fair Funding Review 2.0, external will see money redistributed from some council areas to others.
After deciding to reduce their share of central government funding, the government gave five London boroughs - Kensington & Chelsea, Westminster, Wandsworth, Hammersmith & Fulham and the City of London - and Windsor and Maidenhead Council in Berkshire the power to raise council tax above the usual 5% cap for two years.
