Glasgow City Council's ruling Labour administration said it has left Cosla, which it says is being used as a "human shield" by the Scottish Government and exists solely in the interests of a "stultifying and artificial unity".
Several councils, Dumfries and Galloway, Aberdeen, Refrewshire and Inverclyde, all Labour-led, have applied to leave Cosla, with South Lanarkshire signalling its intention to quit yesterday too.
The row centres on issues of where the power lies within the organisation, how funding to local authorities is distributed and the overall effectiveness of the body.
A break-up could affect budgets for services as Cosla negotiates the overall funding package for local government with ministers, as well as wage deals for around 250,000 council staff.
The rebel authorities have been warned their brinkmanship risks backfiring and costing their citizens tens of millions of pounds.
But Glasgow, which is choreographing the exits, has claimed that current plans to change voting structures within Cosla and how £10billion is split between councils would deny it around £15m.
Council leader Gordon Matheson also said the intervention last week by finance secretary John Swinney, spelling out to each council what it would gain or lose if the decision on funding distribution was overturned, created irreparable divisions between member authorities.
Elsewhere however, Labour council chiefs have been accused of doing their authorities out of millions by taking party position in Cosla.
Writing in today's Herald Mr Matheson said: "Although it might stagger zombie-like for a period, Cosla is finished the moment the two sets of figures are put on the agenda. It will certainly be the last vote Glasgow casts.
"It's also perfectly possible for local government to come together for national collective bargaining for example without the need for a separate organisation with its own substantial office and bureaucracy.
"Cosla is used by the Scottish Government as a human shield. Ministers divert criticism about cuts and claim they are merely implementing the funding formula agreed by Cosla. And councils end up squabbling among themselves over scraps."
Because it runs 16 of the 32 councils, Labour has half the votes in Cosla's prime decision-making body and blocked changes to the funding formula for councils which could have cut spending to Labour areas.
They backed a "flat share" increase in funding instead of a "needs-based" settlement taking into account changes in population and deprivation.
Councils run by other parties felt they had been unfairly shortchanged and joined forces to start a review of Cosla's constitution to dilute Labour's influence.
Leader of the SNP opposition in East Dunbartonshire last night accused the council's Labour leader of giving up more than £4m by siding with party colleagues over how cash was doled out.
Ian Mackay said: "Loyalty to Labour is a bigger consideration than loyalty to the tax payers of East Dunbartonshire it seems."
Glasgow SNP chief Graeme Hendry said: "Once again, Glasgow Labour's inability to work in partnership puts services, jobs and investment at risk.
"What of the broken relationships in local government, the lost contacts, the increased confusion and lack of insight for Glasgow's councillors and officers?"