Council chiefs have set aside £15m to cover the cost of an equal pay ruling.
The claim covers more than 3,000 past and present employees
Last year a tribunal ruled that 3,000 of Cumbria County Council's female staff had been paid less than male colleagues for work of equal value.
The council set aside £8.7m to cover compensation claims, but has upped the figure to £15.3m because it believes the sum may not be enough.
It is also disputing liability over the claims and has lodged an appeal with the Employment Appeals Tribunal.
The case centres around 3,000 staff past and present, ranging from care assistants to cooks and school crossing patrols.
Councillor Joan Stocker, deputy leader of the council, warned the pay-outs could mean cuts to services.
She said: "Cumbria is not alone in facing equal pay costs, but this is potentially the largest single financial problem that the council has ever had to face.
"That will involve fundamental service reviews which will not only look at what services we provide but also the way in which we provide them.
"This will produce options which some may find unpalatable."