The Environment Minister has announced plans for the abolition of 83 local authorities with nearly all of them town councils as part of plans to save €420 million.

The number of councillors will also be slashed by 42% from over 1,600 to 950.

500 local authority staff will also be made redundant in the next 18 months.

Phil Hogan says this is the most fundamental overhaul of local government in more than 100 years.

All 80 town councils will be scrapped with a new system of municipal districts operating under the county or city council system.

The city and county councils in Waterford and Limerick as well as the 2 Tipperary councils will be merged into single authorities for the 2014 local elections.

Galway and Cork will maintain their city and county council structures.

There will be another 500 redundancies across the local authority system.

No changes are on the cards in Dublin for now.

However at the 2014 local elections voters will be asked if there should be a directly elected mayor in the capital.

The Taoiseach and Minister Hogan outlined their plans this afternoon.