BLACKBURN with Darwen Council is £114.7million in the red and owes £765 for each man, woman and child in the borough, according to a new finance report.
The town hall's debt is almost double the next highest bill for a borough council in the county and £20million more than East Lancashire's other five councils added together.
Preston is next in the list with a debt of more than £71 million followed by Burnley Council with £40.6 million.
Blackburn with Darwen's debt is made up of a wide range of short and long term loans, many taken out to pay for new accommodation in an area which is one of the worst housing blackspots in the country.
The town hall has drawn up a list of comparable councils but still comes out worse than large boroughs like Luton, Gloucester and Preston.
But finance director Alan Cotton insists the picture is not as bad as it first looks. He said: "The amount of assets the council has must be taken into account when looking at these figures.
"Blackburn with Darwen does have the highest figure in Lancashire but the picture is not as bleak as first appears.
"The debt has to be balanced against our assets and if we sold all our assets off we would be able to give money back to council tax payers."
Assets owned by the council include the town hall complex and property across the borough.
Mr Cotton added: "It should also be remembered that we have some of the worst housing problems in the country.
"In recent years we have had to borrow large amounts to pay for improvement schemes in the borough."
The finance director added: "This is a report about the way finance is managed in the borough and we do well when compared to other authorities.
"This is a large amount of debt to manage and we pay below average interest rates at 8.5 per cent."
Rossendale owes more than £29 million, Pendle £21.6 million and the Ribble Valley has the lowest debt with £6.2 million.
The highest interest rates are paid by Hyndburn with 9.54 per cent on £38.7 million in loans.
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