A row has ignited over a council's part in a so-called "lie detector" test to assess the authenticity of some benefits claimers.
Cornwall Council confirmed tonight that corporate resources member Fiona Ferguson has tended her resignation to the cabinet over the authority's involvement in "voice risk analysis", a method sometimes used by contractor Capita in combating benefit fraud.
The company says the service provides "a new verification method for local authorities by assessing benefit fraud risk and verifying applicant information over the phone, in real time".
The contract will cost the taxpayer around £50,000 but is intended to save many times that in preventing false claims, the council said.
But Emma Carr, deputy director of civil liberties campaign group Big Brother Watch, said: "The Government has said the technology is no more reliable than flipping a coin and academics have even described it as being little better than astronomy at detecting fraud.
"Considering this lack of faith in the technology, it is clear that Cornwall Council has completely wasted money on an illiberal and unproven technology.
"This sort of action stinks of 'guilty until proven innocent' and perhaps it would be more useful to introduce more rigorous checks and testing before benefits are handed out."
Cornwall Council's involvement relates to its single person discounts on council tax. It states that research carried out in other areas of the country suggests around four per cent of these could be inappropriate claims.
Identifying and removing them could save at least £1 million, which could then be used to support essential services for people in Cornwall, the authority said.
In a statement this evening, a council spokesman said: "As part of this 'zero tolerance' approach to fraud the authority has commissioned Capita to carry out a review of all council tax payers who are receiving a 25% single person discount on their council tax bills. The cost of this contract is around £50,000.
"Initial letters asking for claimants to provide information on the current circumstances have been sent to more than 30,000 households. Reminder letters were then sent to households which had not responded to the first letter.
"Telephone interviews will now be carried out with a number of claimants to verify the details they have provided. These interviews will be carried out by trained assessors who will use specialist technology to assist this process. This technology has been successfully used by a number of local authorities carrying out similar reviews."
It said all claimants will be advised that the calls will be recorded, monitored and used for fraud prevention purposes.
In a statement, council leader Jim Currie said he was "aware of Fiona's views over the issue of voice recognition software".
But he added: "There is tremendous pressure on the council's budget and we need to do everything we can to prevent fraud. This will not affect people making genuine claims but we estimate that identifying and removing inappropriate claims could save the council at least £1 million.
"This money could then be used to support essential services. On balance, therefore, I am not prepared to place any restrictions on our contractor at this late stage."
Councillor Ferguson, new leader of the Conservative group on the Conservative-Independent coalition authority, was unavailable for comment tonight.
A Capita spokesman declined to comment.