COUNCILS have begun putting the brakes on spending on local services because of poor household charge collection returns.
Environment Minister Phil Hogan is holding back vital cash until the local authorities improve compliance with the charge in their area.
Householders in the north-west, north-east and midlands are facing the harshest cuts as they have the lowest levels of compliance.
Donegal, the county with the lowest collection rate, has started to curb new spending.
A total of €4m has been withheld from the county because of the deficit in revenue from the household charge.
Donegal county manager Seamus Neely, in a report to the council on Monday, said there had already been a "temporary cessation of expenditure" in some areas as a result.
A second review of areas where spending could be temporarily halted next year was planned, he said.
"Every effort is to be made as part of this process to ensure that the impact to front line services are minimised.
"I would point out that there will be implications for the continued provision of services to citizens, as provided for in the 2012 budget, in the event that expenditure cuts of €4m must be planned," he said.
A Donegal council spokesperson said: "The council is looking at areas where it can postpone expenditure for a short period of time until 2013 and an exercise is currently ongoing to identify areas where this is possible.
"It is expected that this exercise will be complete in the next few weeks and until this is complete it is not possible to say what areas will be affected."
Households in Offaly, Louth and Laois also face big cuts as these counties have low levels of registration.
Dun Laoghaire-Rathdown is likely to get almost its full allocation of central government funds as it has the highest number of people paying up.
This is the constituency of Richard Boyd Barrett, a leading opponent of the €100 charge.
He did not respond to a request for comment.
Speaking to the Irish Independent, Mr Hogan said he had withheld local funding pending better performance in relation to the household charge.
Councils that failed to improve would have no option but to reduce services.
"The household charge is part of the estimates of each local authority. And if they haven't got that income coming in from that source then they won't be able to meet the level of service they bargained for," the minister said.
"They will have to reduce their level of services."
Similar cash cuts will be made in other counties with low levels of compliance.
Offaly (53.8pc collection rate) is set to have its budget cut by about €1.5m, a 12.5pc drop on its previous allocation of €12m.
Louth County Council, with a rate of 54pc, faces a 12pc cut, or €1m.
Meanwhile, more than 100,000 private householders are about to get letters urging them to pay the charge to avoid prosecution.
A total of 1,010,3332 homeowners have paid the charge, with 610,482 refusals.