The Scottish Government has been accused by Labour of giving up too many powers to convince councils not to increase tax this year.
Labour is worried that "vulnerable" people will suffer
Ministers are allowing councils more freedom to spend money as they see fit.
Scots Labour leader Wendy Alexander agreed that "ring-fenced" funding should be slashed, but said government had to support vulnerable people.
First Minister Alex Salmond said Labour councils supported the move and claimed the central party was "confused".
The cut in ring-fencing - from about 25% in this financial year to about 4% in the next - was part of a deal between the Scottish Government and local authorities.
But Scottish Labour said the agreement had sacrificed too much to deliver a council tax freeze.
Ms Alexander told BBC Scotland's Politics Show there should be a "big reduction in ring-fencing", but added that central government had to show its commitment to tackling issues such as domestic abuse.
"I have no doubt that Labour councillors, indeed Labour councils, have spent their life looking after the homeless, women's aid, all of these poor, weak, vulnerable groups that we came into politics for," she said.
"But I frankly can't have the same confidence that a Conservative-controlled council, or perhaps even an SNP-controlled council or an independent council will, for example, meet our obligation to women suffering domestic violence."
Mr Salmond told the programme that most people had been surprised by the success of his minority government over the last eight months, and he expressed hopes that the Scottish budget could be steered through in the same manner.
The first minister added: "When people start to look at the alternatives and the confusion and chaos from some of the other opposition parties over things like ring-fencing for example, you can see the benefits of having an SNP government."
The issue of ending ring-fencing has divided opinion.
David O'Neill, the Labour leader of North Ayrshire Council, said there was too much micro-management coming from ministers and Martin Sime, of the voluntary group body SCVO, argued that the decision on how to spend money should be up to local authorities.
But Lindsay Scott of the charity Help the Aged, said non-ring fenced areas were reliant on goodwill.
"Sometimes, people don't always live up to their promises," he added.