ntic City’s mayor, Don Guardian, has dubbed a state proposal to rescue the financially troubled city as a “fascist dictatorship”.

Outlines of the new legislation include a plan for the state to appoint an official with the authority to enter contacts, sell city-owned properties, terminate employee contracts and veto city council minutes.

Addressing hundreds of city workers and residents at a news conference outside city hall, the mayor described the states idea as “an insult to democracy”.

Concerned about the little say Atlantic City citizens and city officials will have if the plans goes ahead, Guardian said: “The final piece of legislation that the state presented to us was far from a partnership.”

The comments show a change in the mayor’s outlook compared to the show of solidarity he displayed last month when he stood next to the New Jersey governor, Chris Christie, in support of the state’s future involvement in the heavily debt-burdened city’s financial affairs.

State senate president, Steve Sweeney, the main sponsor of the state proposal, called the mayor’s comments a "childish act".

Speaking to New Jersey Media, he said: "It does nothing to solve the problems they have. What they really need to do is look in the mirror to see where the problem exists."

Atlantic City’s tax base has shrunk in recent years because of gambling competition from neighbouring states; as a result four of the city's casinos that shut in 2014 have remain closed.

Officials warn that the city could run out of money within weeks.