Controversial Ingquza Hill Municipality in the Eastern Cape wants to borrow R10million to save itself from bankruptcy.
The move has angered opposition party leaders.
They have called on local government MEC Sam Kwelita to intervene. They say political infighting and the subsequent court actions have emptied the municipal coffers.
Mayor William Ngozi, whose executive tabled the loan proposal at a recent council meeting, has refused to comment.
But PAC spokesman Vuyani Gwegwe is opposing the loan. Instead, he has demanded that Ngozi publicly account for the municipality's expenditure.
UDM spokesman Gordon Sigcau alleges huge misappropriation of funds has taken place because of internal squabbling over issues and positions within the municipality.