Scotland's local authorities are on course to hit an annual £533m black hole in their finances by 2018/19.

The deficit forecast forms part of a report into local government spending by the independent watchdog the Accounts Commission.

The commission says the gap between what councils raise and what they spend will amount to £87m in this financial year, growing to an estimated £367m in the next financial year, then rising again to £533m in 2018/19.

It estimates more than a third of councils will have deficits larger than their total cash reserves by 2018/19.

More than half of the local authorities will dip into their reserves to balance their budgets in this financial year.

Angus Council plans to use almost a quarter (23%) of its reserves in this financial year alone.

The watchdog warned in its report: "Councils' budgets are under increasing pressure from a long-term decline in funding, rising demand for services and increasing costs such as pensions.

"There is variation in how these pressures are affecting individual councils, with some overspending their total budgets or budgets for individual services such as social care.

"Councils need to change the way they work to deal with the financial challenges they face. All councils face future funding gaps that require further savings or a greater use of their reserves."

The body estimates councils received 57% (£18.9bn) of their funding from the Scottish Government in the last financial year.

When the figures for this financial year were taken into account, the watchdog estimates councils have had a real-terms reduction in government funding of 8.4% since 2010/11.

The Accounts Commission said this is "approximately the same as the reduction in the Scottish Government's total budget over the same period".

The report said councils "have experienced a long-term decline in their grant funding from the Scottish Government", adding this "is is expected to continue to fall in future, putting greater pressure on budgets".

Overall council debt currently stands at £13.72bn, costing local authorities about £1.5bn a year in interest and repayments.

Councillor Kevin Keenan, finance spokesman for local government umbrella group Cosla said: "It is virtually impossible to set medium and long-term financial plans based on short-term funding and yearly budgets from Scottish Government.

"There is no doubt that despite difficult settlements from the Scottish Government, councils have managed their finances well but significant challenges lie ahead in maintaining this."

He added "unlike many other parts of the public sector, Scotland's councils have by law to set a balanced budget".

Mr Keenan continued: "As the report recognises, the Scottish Government provides around 60% of the total income for a council.

"Sadly, over the past six years, up to and including 2016/17, Scottish Government funding (revenue and capital) for councils has fallen by over 8% in real terms.

"We all know the direction of travel for public-sector finances. Indeed, the report actually warns of further reductions in funding for councils from central government while demand on council services, particularly social care, continues to rise.

"Whilst councils and councillors do their best to mitigate the damage to communities from political choices made at the centre, this is becoming harder and harder to do."

Scottish Conservative local government spokesman Graham Simpson said the report "highlights the scale of the difficulties faced by councils who have seen their budgets slashed by the SNP in recent years".

The Tory MSP said: "Most councils have coped well but it is getting more and more difficult.

"The report rightly warns that worse is to come and we would urge the SNP to come clean on what lies in store for local authorities down the line."

Scottish Labour deputy leader Alex Rowley said: "These figures confirm that the SNP has slashed funding for local services, like schools and social care, which put the life chances of people across Scotland at risk.

"Last year, the SNP cut £500m from local council budgets. This has a direct impact on vital local services like schools and social care."

Andy Wightman, the Scottish Greens' local government spokesman, said: "Scotland's local authorities face real financial challenges and reductions in funding will inevitably have an impact on local services.

"Much time and effort has been spent negotiating the financial relationship between Holyrood and Westminster, and what powers should be controlled by the Scottish Parliament.

"It is clear we now need to dedicate as much time and energy on negotiating a fiscal framework for local government to set the ground rules for future funding and to increase fiscal autonomy and democracy."

A Scottish Government spokesman said: "Despite the cuts to the Scottish Budget from the UK Government, the Scottish Government has treated local government very fairly.

"This report highlights the pressures that councils like other parts of the public sector face but also highlights that they are continuing to improve services.

"We expect local authorities to continue to use resources as efficiently and effectively as possible to ensure taxpayers get the best possible services and value for money."

He added: "The report makes a number of recommendations aimed at helping councils to meet future challenges.

"We welcome the report and would expect all councillors to consider and take any necessary action to implement its recommendations."