At least 246 staff will lose their jobs at Wolverhampton City Council by the end of March when the council will lose £20.4 million in grants, it can be revealed today.

Bosses at the council said that was the number of workers on fixed-term contracts whose jobs are funded by external grants from the government that are due to be cut by the spring.

But bosses have warned that they are still working to identify staff whose jobs are funded by grants that may still be cut later on in the financial year.

Details of which departments are affected have not been revealed but the posts will see 91 manual and clerical jobs go along with 154, professional, managerial and technical staff.

One under 18 will also be made redundant.

The council has £4.8 million available to pay for redundancy compensation.

Staff are being invited to apply for voluntary redundancy but if the council does not axe 246 posts by March 31 — when the funding runs out — it will have to make compulsory redundancies.

The cuts relate to 3.5 per cent of the council’s workforce outside of schools, which are not being affected.

Wolverhampton City Council is losing £20.4 million in grants, or seven per cent of its funding, on March 31 taking its annual budget in 2011 to £292m.

A further £9.6m will be cut the year after.

Leader of the council Roger Lawrence said: “It is going to be a very difficult.”