Policing in the Westcountry would suffer "catastrophic" damage if the Government's one-year council tax freeze offer is accepted, officers have said.

The Devon and Cornwall Police Authority will meet later this week to set the force's budget amid warnings that the deal would pose a major threat to neighbourhood policing.

The force had already planned to lose one-in-five officers – 700 from a compliment of 3,500 – to meet cuts of almost £50 million imposed by the Government's 2010 comprehensive spending review. However, any freeze in council tax would see another 56 officers have to go, with neighbourhood officers, regarded as the bedrock of modern-day policing, bearing the brunt.

The Police Federation, which represent rank-and-file officers, has now written to members urging them to reject the deal in favour of a rise in council tax. It said the authority risked adding to "already unsustainable staffing reductions".

The letter, a copy of which has been seen by the Western Morning News, states: "Sadly, a failure to increase the budget baseline will have a massive and detrimental effect over future funding streams.

"The inevitable results will be further staff reductions above the numbers already predicted.

"We firmly believe that reducing the constabulary by 700 officers over the current comprehensive spending review period will severely impact on operational resilience, and any further staff cuts will be catastrophic for service delivery."

Papers prepared for this Friday's meeting outline three possible options for the force's budget strategy until 2016.

The first is to increase the police's share of council tax bills – currently at £156.60 for a Band D property – by 3.94 per cent for 2012/13, a rise of £6.24 per year. With the help of savings from the review of police officer pay, it would mean that the force could sustain 2,864 police officer posts in four years' time.

The second option on the table is for a 3 per cent increase in bills, which would put police officer strength at 2,834 in 2016. The third would freeze bills in Devon and Cornwall for one year, but leave a £2.9 million deficit in subsequent years, with officer numbers having to drop to 2,744.

"Officer numbers are important because it is through people that we deliver our services," the budget document states.

"The work we have done to reorganise policing has set minimum numbers for crime investigation and response. We do not believe that we can reduce officer numbers further in these areas without compromising our ability to deal with calls for assistance or investigating crime – fundamental police roles we cannot halt. This means that further reductions in numbers after the current comprehensive spending review will disproportionately fall on to neighbourhood policing.

"We know that visibility, listening to our communities and dealing with antisocial behaviour are key drivers of public confidence in the police doing a good job and we know that these are key activities for neighbourhood policing. The financial decisions taken today will directly impact on officer numbers and therefore on our ability to provide our key neighbourhood function in the medium term."

Each budget is based on continuing the controversial policy of forcing officers to retire after completing 30 years' service, which is currently the subject of a legal challenge.

The budget will be the last set by the authority which will be replaced by the new elected commissioner in November. It needs to be passed by a majority of the 18 authority members, but also by a majority of the ten councillors who sit on it. Eight of those represent the parties in the Government coalition – five Conservatives and three Liberal Democrats.