The little-noticed rule change has already given the leader of Manchester City Council, Graham Stringer, pounds 17,400 a year, twice his previous allowance, while elsewhere proportionate rises of between 100 and 1,000 per cent are being voted for.
Glasgow's leader, Patrick Lally - now on pounds 24,000 - gets the most among the city councils.
But some councils, including Birmingham, Newcastle and the London boroughs, have smelled a political rat and refused so far to make use of this new liberty.
Mike Bower, Sheffield's Labour leader, calls the rule change "a poisoned chalice". And an embarrassed Frank Dobson, Labour's environment spokesman and a former leader of the London Borough of Camden, called it a "cynical effort to get a lot of bad stories against local councillors".
For Tory ministers, who are also debating whether to abandon the tight caps on overall council spending, lifting the lid on councillors' payments has already delivered a political bonus.
Michael Heseltine seized on Labour Nottinghamshire's plan to increase basic allowances from pounds 800 to pounds 3,000 a year, accusing councillors of putting their "snouts in the trough". That rise has now been deferred. More anti-Labour headlines are sure to follow as other councils vote for new allowances.
Labour in turn has tried to pillory Tory councillors, such as the leader of South Staffordshire who voted to transform his pounds 360 into pounds 4,000 a year.
But Labour's own Shadow Welsh spokesman Win Griffiths has criticised a 400-per-cent increase in payments to members of Labour-controlled Mid- Glamorgan County Council. This would give them a basic rate of over pounds 10,000 each - but the County Council only has 10 months to live before being replaced by new unitary councils.
Until April Whitehall tightly controlled allowances, which were usually paid on the basis of meetings attended. Then came the Local Authority (Members' Allowances (Amendment)) Regulations 1995, which give councils carte blanche to pay themselves out of the rate fund on any basis they choose. District auditors can intervene only if proper procedure is not followed or payments are grossly "unreasonable".
The Association of Metropolitan Authorities (AMA) says a reasonable guide is the median white-collar salary which would give top councillors around pounds 15,000 a year.
Joan Jones, deputy secretary of the AMA, said that that was a low benchmark, and using the salary of MPs or chairs of quangos would push it higher.
Most councils look set to follow the lead of Manchester and Leeds, which are paying all councillors a flat rate (pounds 5,160 and pounds 2,150 respectively), regardless of how many meetings attended.
Committee chairs and opposition leaders get extra, while council leaders, who often spend 50 hours a week or more on council business, get what is in effect a full-time salary. There was no party political disagreement at Leeds' decision to give Labour leader Jon Trickett a rise from pounds 8,291 to pounds 17,200. Leeds' population is 720,000 and the council budget is pounds 1 billion a year.
Until now payments have generally been low. Even in the heyday of activism in London in the 1980s, Ken Livingston and other Greater London Council leaders lived on as little as pounds 3,000 in allowances and expenses.
London boroughs are currently conferring with each other on how much councillors should pay themselves.Reuse content