A blueprint for "radical" town hall reform including more elected mayors and a big cut in Whitehall-set targets will be unveiled by the Government today.
The long-delayed White Paper, being published by Communities and Local Government Secretary Ruth Kelly, is designed to shift power closer to local residents.
Increased powers for mayor-style council leaders and a right for communities to call police, health and education chiefs to account will feature prominently.
Other devolutionary measures will include the replacement of much centrally imposed red tape and inspections with a right for local people to challenge decisions.
Ministers have also faced pressure to restore business rates to local control to give town halls greater control over their own finances.
A comprehensive review of local government finance being led by Sir Michael Lyons is not due to report to ministers until the end of the year.
Local Government Association chair Sandy Bruce-Lockhart said an "audacious and deep-seated reform" was required to end a "crisis of trust" in local politics.
A recent opinion poll commissioned by the Government showed just one in five people was satisfied with the influence they had over local decisions.
Lord Bruce-Lockhart, a Tory life peer, said: "We see an erosion of democracy, a crisis of trust and a cynicism with politicians.
"We must give people back power and influence over their lives, their local services, and the future of the places where they live."
Central control had "wasted the public’s money...sapped the energy, enterprise and innovation of front-line staff...denied local choice, and eroded local democracy itself," he said.
"It is time for Whitehall to decentralise, devolve and deregulate to set people free of bureaucracy and improve the lives of millions of people.
"This also means that council leaders must accept that the buck stops with them when things go wrong." he added.
Dermot Finch, director of the Centre for Cities research unit, added: "Clear leadership, including directly elected mayors for cities that want them, provide a visible line of accountability.
"Giving towns and cities more control over their finances, including powers to raise and spend business tax locally to invest in transport and skills, would help increase jobs, improve transport and drive economic growth."
Under the proposals to give local residents more input, police chiefs, NHS bosses and representatives of bodies such as Jobcentre Plus, Regional Development Agencies and the Highways Agency could all be forced to account publicly for their actions.
Commons-style committees of local councillors would conduct inquiries - triggered by public demands – and then publish recommendations.
A survey of 4,000 people by BMG, published by the Government this week, found that fewer than half of people were happy with the way their local authority ran services.