Faced with either imposing massive budget cuts or bankruptcy within five years, councillors in Shetland voted through a multi-million pound savings plan on Wednesday.
More than 300 jobs are expected to be lost and a raft of services are now under threat.
At a marathon meeting, councillors agreed savings of £12.5m over the next year, which is 10% of the entire budget, in a bid to stave off longer term financial ruin.
By 2017, a total of £38m will need to be cut or the council could go bankrupt.
Services from inter-island ferry sailings to social care for the elderly are all under threat and education could take the biggest hit with nine schools earmarked for closure.
In 2010, the Audit Commission was highly critical of the council and financial management was highlighted as a weakness.
The body has already saved £16m this year but the council insists islanders will continue to enjoy some of the best services in Scotland.
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