Radical proposals to create the UK's first 'super council' were revealed today.
The London boroughs of Westminster, Hammersmith & Fulham and Kensington & Chelsea said all their services could be merged to generate savings of between £50m and £100m a year.
Every service from chief executive and senior directors to street cleaners and social workers could be shared, they said, in a joint statement.
Under the plans, each authority would keep its council leaders and local ward councillors.
The size of the new authority could be bigger than Glasgow or Leeds, they said.
The leaders of the three councils - Colin Barrow from Westminster, Stephen Greenhalgh from Hammersmith & Fulham and Sir Merrick Cockell, from Kensington & Chelsea - said that with cuts in central government spending to reduce the national deficit, their priority was to protect front-line services.
They said: "Ensuring we can provide a high standard of local services in today's tough economic climate means thinking differently about how we operate, concentrating on what's important to the people we serve and ensuring we continue to care for the most vulnerable in our communities.
"To achieve this in the age of austerity we need to seriously examine new ways of working including sharing service provision with other local authorities to deliver more for less.
"That is why we have met and agreed to progress to plans to share every council service between our three councils. This may include merging services to reduce duplication and drive out needless cost.
"While we won't rule anything out at this stage, we expect to focus quite quickly on a few major areas where sharing and merging services is viable and good for the public."
Westminster and Hammersmith & Fulham are already working to merge their children's services department which will create savings of £2.5million a year for each authority, they said.
The three councils said they would now look to merge their adults' services departments.
The authorities said they had tasked their chief executives to examine the proposals in more detail before reporting back formally early next year.
The statement said: "In the coming weeks we will set up a series of working groups to develop and study options for three main areas: environmental services, family services and corporate services.
"Our chief executives will report in February next year with recommendations for action before we then consider the next steps, while our staff and our partners will be fully consulted at every stage, with public engagement when firm plans emerge."
The statement added: "Our plans may be the first of their kind, but sharing of services in this way can no longer be viewed as a radical concept. It will soon become the norm for local authorities looking for innovative ways to keep costs down while delivering high quality front line services."
Mr Greenhalgh told BBC Radio 4's Today programme that there would be "significant reductions in staff".
"Clearly if you have less money to spend you are not going to be able to safeguard every job and we are going to see significant reductions in staff but this is about squeezing every penny, every pound, to protect frontline services," he said.
"There is a lot of bureaucracy involved with delivering local services: in adult social care, we often find that of the three pounds we spend, one pound is spent deciding what to do with the other two.
"This is about minimising that overhead and we still have political sovereignty, still have the ability to choose how we spend the money locally. What we are doing is ensuring that as much as possible goes to the frontline.
"We are not talking about merging the frontline so it is ubiquitous and just a homogenous entity; we are going to commission those services and take into account the political differences that exist."
But he said cuts to frontline jobs could not be ruled out.
"There may well be because every year we are looking at more efficient ways of delivering those services."
Local Government Secretary Eric Pickles said: "These councils are leading the way in local government and voters will expect others to get on board and follow suit.
"This is exactly the sort of innovation that will help councils to protect hardworking families and the most vulnerable.
"By sharing back-office services, they'll be able to protect the frontline - and even improve the choice and services that's on offer to local residents.
"We're supporting these sorts of moves by giving unprecedented freedom and flexibility to councils to make their own choices, funding a council tax freeze, and calling time on the bureaucratic red tape and pointless form-filling that has hampered councils for so long.
"Sharing services is just one of the options open to councils to ensure they are making the most of every pound they have - alongside moves to become more transparent, improve procurement and cut out waste."