The Liberal Democrat-run authority said the review, which is due to be published on 10 November, showed “the true scale of the financial challenge”.
If it has to issue a Section 114 notice, the government could then take action to reduce spending through the appointment of commissioners, as it has done in Birmingham.
The council said it had had several conversations with the government about the issue, which were initially focused on “longer-term funding the council needs over the next three years to enable it to invest in transformation, stabilise its budget and bring an end to its financial emergency”.
But the growing budget pressures have since forced the council to ask for emergency funding.
The authority was run by Conservatives until the Liberal Democrats took control in May.
Roger Evans, the councillor responsible for finance, said: “For a number of years now the council has been overspending its budget – a budget that was set by the previous administration.”
He said the council had been using reserves to meet the deficit and there was now “none left for us to use to help us meet this shortfall”.
Evans also said a shortage of government funding over the years had been “contributing hugely to our financial challenge”.
He thanked staff for their efforts to meet the budget shortfall and added: “Despite our challenges, I truly believe that together, we can make Shropshire Council sustainable.”
