A Tory-led council wants to fund a trade union legal fight against the Government's decision to award a lucrative train-building contract to a German firm.
Councillors in Derby will vote next week on whether to financially back any judicial review proceedings launched by Unite in a bid to have the decision overturned.
Derby-based manufacturer Bombardier has announced 1,400 redundancies as a result of losing out to rival Siemens in the contest to supply rolling stock for the Thameslink route.
The firm's chairman told MPs that he was "struggling to understand" the decision, which unions said could eventually lead to thousands more UK jobs being lost.
Colin Walton expressed his frustration at a specially-convened Commons committee meeting, as a large delegation of supporters converged on Westminster to demand a rethink.
Transport Secretary Philip Hammond defended the process and said starting from scratch would take two to three years and cause unacceptable disruption to rail services.
The Prime Minister had accepted his call for a review of how other European countries granted more work to domestic firms, he said, but it was too late to revisit Thameslink.
But a motion jointly tabled by Derby council leader Philip Hickson and his Labour counterpart, directly criticises Mr Cameron over the "fundamentally flawed and perverse" decision.
It expresses "concern and alarm (at) both the Prime Minister's and the Government's continued refusal to reconsider" and commits the council to working with Unite.
Financial support would be dependent on council lawyers agreeing Unite "have an arguable case".
Mr Walton told the transport select committee that it had been hugely successful in winning contracts other than those from the Department for Transport.
They had put forward a "cutting-edge project" but the Government had been swayed more by financing than by the quality of the trains on offer, he suggested.
Much of the firm's current work was coming to an end and securing the contract would have allowed it to avoid laying off any permanent staff, he said.
The process for choosing who will build the rolling stock for the Crossrail project in the capital has been put on hold while procurement methods are examined.
Unite Assistant General Secretary Diana Holland told the committee: "This is a moment for the Government to step back and think again about this.
The union was deeply concerned that the contract had been awarded "around the credit rating of a company rather than on its ability to make trains".
Unite believes another 1,600 jobs will go if the company decides to leave the UK, while up to 12,000 positions in the supply chain will also be at risk.
Preferred bidder Siemens, which was also represented at the hearing, said it would create 2,000 new jobs in the UK as a direct result of the Thameslink project.
Steve Scrimshaw, a managing director, insisted "lots and lots" of factors were taken into account other than finance in the awarding process.
Mr Hammond said the credit rating was "unlikely to have been a determining factor" in the decision and said a wide range of value-for-money considerations were involved.
No objections had been raised about the process until the announcement was made, he noted.
The job losses were "deeply regrettable", he said, but said Bombardier had enjoyed huge success and was "not a company that needs propping up".
While the option of starting again from scratch with Thameslink was available to him, he added, it was not an option he was considering.
"My judgment is, that with billions of pounds of taxpayers' money already committed, and a series of other projects dependent upon it, and the long-time delays, that would not be appropriate in this case."
In July, Mr Hammond and Business Secretary Vince Cable wrote to the Prime Minister expressing concerns that UK firms were losing out on procurement.
They said there was "a perception that other EU countries appear to manage their public procurement processes with a sharper focus on domestic supply than we have hitherto".
Mr Cameron has now agreed to include an examination of the issue as part of the Government's growth review, he told MPs.
A delegation of more than 200 Bombardier workers, Derby councillors and local business leaders will travel on a specially commissioned Bombardier-built train from the East Midlands to London today to press the Government to change its decision.
The East Midlands train, called Spirit of Derby, will travel from Derby to St Pancras, carrying union officials, workers and Conservative, Labour and Liberal Democrat councillors.
Among them was Mr Hickson who told BBC Radio 4's The World at One: "They did not take account of all the people that will potentially be made redundant and all the businesses that will close down as a result of this decision.
"It clearly can't be the best value if the UK is going to spend, on our reckoning, between £150 million and £200 million a year paying out benefits to people losing their jobs."
The Government's response had been "pitiful", he said.
"I do not think they have grasped the widespread anger in the city and in the country as a whole that this is the last train manufacturing company in the country and that if it goes, as it may well do if they do not revisit this decision, in the future every train, every tram, every underground train will have to be imported. That can't be right."
Prime Minister David Cameron blamed the previous Labour administration, which set up the contract process, for the situation.
"I want to do everything I can to help Bombardier, which is an excellent company," he said at Commons question time in response to Heather Wheeler, the Conservative MP for South Derbyshire.
"But before people shout from the party opposite let me just remind them: this procurement process was designed and initiated by the previous government.
"It is their responsibility."
The Labour rail minister at that time, Tom Harris, was among committee members questioning Mr Hammond - as the Secretary of State pointed out when he asked if he wanted to reverse the decision.
"I wish that time machine was accessible to me," Mr Harris wrote on Twitter, in reference to the question he posed to Mr Hammond.