Kent County Council is claiming it is owed more than £14m by the Home Office for its asylum seeker expenses.
Sir Sandy says Kent is owed more than £14m for asylum expenses
The council has pledged not to put the cost of dealing with asylum on council tax and says it was promised the Home Office would pay the full amount.
"This is absolutely chaotic. The Home Office does not seem to know what is going on," said council leader Sir Sandy Bruce-Lockhart.
The Home Office said it was waiting for the 2003-2004 claims to be audited.
A county council cabinet meeting was told on Monday that daily discussions with the Home Office were getting nowhere.
Sir Sandy said the council was owed £8m from 2002-2003 and £6m from 2003-2004.
"Our officers are deeply frustrated that the Home Office seems to have lost some of the papers and they can't find the data," he said.
"We warned the Home Office three weeks ago that we had to set our budget and we have to be repaid."
'Figures in question'
Mike Eddy, leader of the opposition Labour group at County Hall, disputed the amount the council was owed.
"When we took this through he cabinet scrutiny committee we were told by the officers that the figures were seriously in question," he said.
"Kent County Council is trying to load as much as it possibly can on to this heading of asylum seekers and then complaining that the government is not giving them enough," he said.
"They tried the same trick in 2001, just before another county council election."
But Sir Sandy said: "I don't think the government can wriggle out of it. We must insist we are paid."