The scale of borrowing by Norfolk County Council - which means County Hall is paying nearly £31m a year in interest - has been likened to "maxing out the credit card".
But leaders at the Conservative-controlled authority defended their financial approach.
Latest figures show the council had borrowed £853.2m as of the end of May, with nearly £50m committed to other long term debts, such as leases.
The council has factored in the potential to borrow up to £80m more in 2022/23 and recently increased its authorised debt limit from £999m to just over £1.06bn.
At a meeting of the council's cabinet this week, it was confirmed the authority is paying almost £31m a year in loan interest.
That figure was £29.2m in 2020/21 and £25.7m in 2016/17.
Brian Watkins, leader of the Liberal Democrat group, said: "The council has been financially irresponsible in maxing out their credit card by borrowing almost £400m over the last five years.
"They are now at the limit they can legally borrow and this puts big projects which require a lot of borrowing, such as the Norwich Western Link, at risk."
He said the council needed a "complete reboot" on how it operates or "could even face bankruptcy".
But Andrew Jamieson, council cabinet member for finance, said the council was nowhere near such a scenario.
He said, while interest rate payments had gone up, the council was spending more, so a key figure was the ratio of those payments to the revenue budget.
And he said: "That was 7.6pc in 2016/17 and 7pc at the end of last year, so that has declined. It is important to put that £31m within that context."
Mr Jamieson said the £80m potential further borrowing was "at the upper end" of what might be needed.
But he said it made sound financial sense to borrow on long-term fixed fees, for projects such as building new schools for children with special educational needs, when interest rates were low.
The council may need to borrow £37.7m to help pay for the Norwich Western Link, if the government agrees to bankroll the rest of the £251m cost.
Green councillor Jamie Osborn said: "The Conservatives are putting the finances of the entire council at risk by breaking their own limits on prudential borrowing."
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