Colchester and Braintree council chiefs are exploring plans to save hundreds of thousands of pounds by pooling buying power and sharing top officials.
The move could see one chief executive take charge of both authorities, with a single boss also heading departments like waste collection, planning and leisure services.
Serving populations of about 150,000 each, the neighbouring councils will also look to win big discounts by jointly ordering supplies like bin bags and office stationery.
Announcing the start of top-level talks on the scheme, the councils stressed they would remain politically independent.
Colchester Council leader Robert Davidson said the move was motivated by the need to make up for cuts in Government grants, with Colchester facing a £4 million budget shortfall and Braintree about £3 million.
"Joining up with our neighbours in Braintree could bring some real benefits to how we deliver services to residents," he said.
Braintree Council leader Graham Butland said: "Working closely with Colchester Borough Council will hopefully deliver greater efficiency."
- More in today's Gazette
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