The Government will help debt-ridden Kaipara District Council in Northland.
The council is struggling with a debt mountain of more than $80 million and open rebellion from some ratepayers facing rate increases of more than 100%.
The council has proposed an average rate rise of 31% to pay the debt.
Local Government Minister David Carter says it is clear that the situation in Kaipara is urgent and action is needed now.
He says Kaipara is dealing with serious issues that it cannot cope with alone and has asked for help.
Mr Carter says the Government will appoint a small review team to work with the council and help it set appropriate rating levels.
However, he says continuing to borrow to pay interest and operating costs is not sustainable.