Britain's top civil servant has been asked to investigate the so-called sweetheart deal for Surrey County Council to deal with its social care funding shortage.
Labour claims the Tory authority, which was planning an embarrassing 15% council tax hike, was given special access to the top levels of government.
More than 80 pages of documents detailing behind-the-scenes discussions indicated ministers were offering ''some extra funding'' from 2018 shortly before the council dropped the rise.
Labour has called on Cabinet Secretary Sir Jeremy Heywood to launch a probe into possible conflicts of interest.
Surrey dropped the plan - which would have required a referendum in the county - on February 7, opting instead for a 4.99% rise which did not require a public vote.
A cache of documents released by Communities Secretary Sajid Javid's department last Thursday - and similar records released by the council - show that on the morning of the decision to abandon the 15% plan, a senior Surrey officer sent a text message to a high-ranking official at the Department for Communities and Local Government
In the text, Surrey's director of finance Sheila Little told DCLG's director of local government finance Matthew Style that council leader David Hodge had shown her a ''note from a Surrey MP about a conversation late last night wit (sic) SJ'' - apparently a reference to Mr Javid - which ''seems to indicate Government are willing to get us some extra funding from 2018''.
Barbara Keeley, shadow social care minister, said: "I am writing to the Cabinet Secretary to investigate whether there was a conflict of interest in the way that ministers handled their contacts with Surrey County Council.
"Why did the leader of Surrey County Council get continual access to meetings with the Chancellor and the Communities Secretary to discuss his council's funding problems while council leaders from Salford and Hull cannot get such meetings?
"Following all these meetings we now see that Surrey County Council will get the biggest increase in share of the funding for social care announced in the Budget on Wednesday. There are questions to be answered on all of this."
A Government spokesman again denied there is any truth in allegations of a sweetheart deal.
He said: "As we have repeatedly made clear, there was no special deal for Surrey County Council and they will not receive any extra funding that would not otherwise be provided or offered to other councils. To imply the opposite is simply untrue.
"As part of the statutory draft local government finance settlement consultation, DCLG discusses local government funding with councils across the country, of all types and all political parties.
"This happens every year, involves councils making representations to the Government, and has always been the process."