The Convention of Scottish Local Authorities (Cosla) is facing threats and notices of resignation from Dumfries and Galloway, Aberdeen, Glasgow, Inverclyde, Renfrewshire and South Lanarkshire councils.
Now Moray Council's ruling Tory/Independent administration says it has been denied £4.3 million of Scottish Government funding for 2015/16 because of a decision taken at Cosla in September.
It would represent a 2.78% cut, larger than any other council, according to Moray's leader Allan Wright. He said the decision went against the advice of Cosla finance officers and the Scottish Government to re-run the distribution formula, based on need.
But a Cosla spokesman said that in all the years the convention had existed, it had been practice to decide distribution without the resultant figures being available. This had lead to a decision based on principle rather than one of winners and losers, which was the only way a membership organisation could operate.