Plans for a co-operative, "John Lewis council" in Lambeth are not just a pre-election gimmick, according to council leader Steve Reed.

Coun Reed insisted running the council as a co-operative will enable it to improve local services in the face of an anticipated 20% cuts in government funding.

The proposals, announced last week, would see the people of Lambeth become involved in the running of schools, nurseries and community projects. In return they may be entitled to council tax rebates.

Exactly what services would be affected and what rebates might be available are, however, yet to be decided, with the council promising a public consultation.

The announcement has been derided by local Conservative and Liberal Democrat councillors as a cynical pre-election gimmick.

Ashley Lumsden, leader of the Liberal Democrat opposition said: "It is quite ridiculous for Labour to talk about how terribly into working with the local people they are, when for the last four years they have done the opposite at every turn.

"They have been shutting down the tenant management estates and we don't have any leisure centres left except for Brixton."

But Coun Reed said: "Wherever we work more closely with the local community we get better services at a lower cost.

"We are setting up a commission in March to explore how much further we can take it and how we can reward people for their time and energy.

"We anticipate an interim report before the election and a launch date in August."

The council hopes to replicate the success of projects such as the pioneering Elmgreen School in West Norwood, where parents form the majority of the governing body.

Kate Scrase, a parent and project manager for the Parent Promoters Foundation, said the partnership between council and community had worked very successfully for the school.

"By giving parents the opportunity to be involved, it has given the school a route in to parental engagement," she said.

"There is lots of research to show not only does parental involvement improve attainment but also children are much happier at school."