Some of Rother’s own councillors say they have been kept in the dark over the damning letter.
Cllr Kevin Dixon, who represents Battle Town, said he knew nothing about the latest correspondence until he was contacted by the Observer on Monday.
The Liberal Democrat Group Leader said: “It sums up the failings at Rother that a letter from the Government about a lack of transparency at the council, is circulated to its councillors by the Observer - and not the council!
“The council and its Conservative Cabinet appear determined not to discuss this in the open - there has been no Cabinet or council discussions about the original letter from Kris Hopkins MP and when this was discussed on BBC Sussex, no-one from the council would come on air and defend themselves.
“Transparency and accountability are essential for good governance and it is apparent that the current regime under Cllr Maynard either do not understand what they mean, or are determined not to comply with the Government’s reasonable requests.
“The serious point for Rother’s Council Tax payers is that if Government funding is withheld from the council, then they could be in serious financial trouble and bad news for the whole district.” He called for Cllr Maynard to apologise.