Stephen Byers, the Secretary of State for Transport, Local Government and the Regions, promised councils the Government wanted to roll back 20 years of Whitehall control over town halls.
He made his pledge as local authority leaders complained Labour had undermined their autonomy by increasing the number of direct grants for services such as education.
In a speech to the Local Government Association conference in London, Mr Byers said a recent White Paper was intended to restore freedom and flexibility to councils to make decisions.
The minister said he accepted that the current powers open to town halls were substantially weaker than when he was last a councillor, in 1980.
He assured the conference there was a "genuine commitment" to look at cutting the number of so-called ring-fenced grants to local authorities.
Under the White Paper plans, top-performing authorities would be given greater freedom, including a free hand in setting council tax rates. But those deemed to be failing faced being placed in administration.Reuse content