The government has ended a review lasting more than three years into a cash-strapped council's governance and finances.

Local government minister Jim McMahon confirmed Peterborough City Council's non-statutory government intervention had ended.

In a letter to council leader Dennis Jones, he said the authority had made progress – but that "risks remain".

Jones said: "This is fantastic news from the government and testament to the improvements we have made in the past three years."

He said financial challenges remained – "as they do for many councils" – and added: "We now have the foundations in place to support the necessary reform in this area."

In December 2021, the city council began an improvement plan after an external team found "significant and urgent" financial challenges at the authority.

An independent panel was required to report back its progress every six months.

Kemi Badenoch, then minister for equalities and levelling up communities, said she was concerned the council had not "fully grasped" the scale of financial challenges facing it.

At the time, Peterborough City Council predicted a £27m budget gap for 2022-23 and had proposed £10m of cuts and savings.

Matt Gladstone, Peterborough City Council's chief executive, said the authority was "unrecognisable" compared with three years before.

He said the council had put a three-year financial plan in place and reviewed its companies, with some brought back in-house and others disbanded.

"We know that financial pressures remain," said Mr Gladstone.

Peterborough City Council predicts a £23m budget gap for 2025-26 and has proposed cutting services including closing libraries to make savings.

Mr Gladstone said: "We are developing innovative and creative ways to provide services differently so that they meet the needs of residents whilst supporting our efforts to become financially sustainable."