A leading member of Norfolk County Council's cabinet has said whatever the secretary of state decides over the proposed Norfolk incinerator it will be lose-lose when it comes to the authority's budget.

Communities secretary Eric Pickles is due to reveal whether he has given the go-ahead to planning permission for the proposed plant at Saddlebow on, or before, Tuesday.

But Steve Morphew, portfolio holder for finance, corporate and personnel on the Labour/Liberal Democrat cabinet, said whether Mr Pickles says yes or no, the end result will be that the council – and taxpayers – have to reach into their pockets.

With the county council proposing £140m of cuts to help plug a £189m funding gap over the next three years, cabinet members are hoping permission is granted to avoid the compensation payments of millions of pounds which Cory Wheelabrator are likely to seek if permission is not forthcoming.

The cabinet is still hoping to pull back from some of the most contentious cuts proposed in its Putting People First consultation.

Speaking at yesterday's cabinet meeting, Mr Morphew said: 'We have got two possible scenarios when the secretary of state makes his announcement. We could have short term, very hard, issues or we could have longer term difficult issues to deal with. There are no winners either way in financial terms. It is lose-lose.'

North-West Norfolk MP Henry Bellingham has written to environment secretary Owen Paterson asking him to review the decision by the Environment Agency to grant a permit for the incinerator, in the wake of the floods.

He said that he had 'very grave concerns' about the planned site for the incinerator, which is flood zone three, deemed by the body to have a 1 in 100 or greater annual probability of river flooding.

He said: 'I do not think the permit process was done properly or rigorously enough.

'The events of the last six weeks, when we had a near miss in King's Lynn, bring into sharp focus that there should be caution in putting any kind of business on the flood plain.'