It was unfair that rural communities received less funding than their urban counterparts, said MPs debating the issue of local government finance on Monday (11 February).
The local government financial settlement for 2013-14 faces a vote by MPs on Wednesday (13 February).
Neil Parish (Con, Tiverton and Honiton) said the settlement would reduce central government support to councils while doing nothing to address long-standing inequality in funding between rural and urban councils.
Mr Parish said: "We are not here to rob urban authorities of their money, but we are saying clearly to the government that there are inequalities and they must be put right."
Overall, rural residents pay council tax which is £75 higher per head of population, yet receive substantially less support for services, according to figures from the Rural Services Network.
The Fair Share campaign is pressing to stop the inadvertent worsening of the situation this year and also campaigning for a reduction in the rural penalty from 50% to 40% by 2020."
Helen Goodman (Lab, Bishop Auckland) said: "I want to make it absolutely clear that this is not just an issue for Government Members; Labour Members are also concerned about it."
Her view was echoed by Tony Cunningham (Lab, Workington).
He said: "This is not a party political issue. Cumbria county council is controlled by Labour and Conservative councillors, and they think that the situation is unfair."
The government has already announced a one-off £8.5m grant. But many rural MPs argue that it is too little, especially because it is for one year only.
Roger Williams (Lib Dem, Brecon and Radnorshire) said self-employed people in rural areas were often reluctant to apply for benefits such as free school meals, which were sometimes a measure of deprivation.
"Rural areas therefore lose out in that way as well," he said.
Geoffrey Cox (Con, Torridge and West Devon) said local authorities such as Torridge district council and West Devon borough council were small, highly rural councils both facing an existential threat from the government's proposals.
"Although West Devon council's needs assessment was raised by 60%, the effect of damping is to reduce the overall funding settlement by 2.5%.
"Over the next three years it must take out £1.4 million from a budget of £7.5 million. It has already saved £1.5 million over the past three years, and the five years before that it saved £2.5 million by sharing back-office services with South Hams district council."
Mr Cox asked: "Where is the council to find the money?"
West Devon council had scrutinised with anxious care the "50 ways to save" document published by the government. It had already implemented 47 of the 50 measures.
"Only three are left and they might have a marginal and peripheral effect. That is why West Devon council—which I use as a case study only— is facing over the next three years the need to take £1.4 million from a budget of £7.5 million.
"It has no serious revenue asset base; its council tax is already at a high level and it has been obliged to disobey the strictures of the Secretary of State by failing to freeze council tax."
Graham Stuart (Con, Beverley and Holderness), who chairs the Rural Fair Share campaign, said the rural penalty saw 50% more per head of population going to urban councils than to rural councils.
"The additional cost of delivery in rural areas and of need in rural areas means that there is a demand across the country for a fairer settlement," said Mr Stuart.
Mr Stuart asked local government minister Brandon Lewis whether he would be willing to discuss next year's settlement, and to ensure that "we get the settlements right" from then onwards.
Speaking in response, Mr Lewis said: "I can confirm that. I have had a few meetings with my honourable friend, and he has - rightly - made a powerful case for people in rural areas."
He added: "I can tell him that I shall be happy to continue to talk to members from all parts of the country about next year's settlement."
To watch the debate as it happened, click here (fast forward to 6hrs 19mins).