Edinburgh city council has warned it may cut 2,000 jobs over the next two years to cope with a budget shortfall.

And it said its pledge not to make staff compulsorily redundant may have to be scrapped although it would seek volunteers for redundancy first.

The figure is 1,000 less than the 3,000 job losses predicted by Unison this week - but 1,000 more than the council warned of in June.

The council expects to save £126m over four years - more than previously forecast.

It says staff make up 60% of the council’s budget so it would be ‘unrealistic to make the required savings without reducing the numbers currently employed.’

The council, run by a Labour-SNP coalition since 2012, hopes to cut the number of staff over the next two years but said they would save more if the cuts were achieved more quickly.

The forecasts are contained in papers to be discussed by the council's finance committee next Thursday.

Alasdair Rankin, the council's finance convener, said: ‘The council is experiencing greater demand for services than ever before, with a growing population in Edinburgh and increasing numbers of older people and younger people, while our overall budget remains the same.

‘We need to take action in order to achieve the necessary savings to meet this demand, and we are making every effort to do this in a way that will safeguard frontline services for the people of Edinburgh.’

John Stevenson of Unison’s Edinburgh branch said the proposed redundancies were part of a drive towards privatising council services.

‘Our view is that if this privatisation is being held up as a way of avoiding compulsory redundancies, it is a flawed idea and all we will end up with is the triple-whammy of privatisation, compulsory redundancies and ruined services.’