Ipswich City Council says the Queensland government is targeting innocent councillors in its attempts to sack elected officials.
Acting Mayor Wayne Wendt says Local Government Minister Stirling Hinchliffe doesn't have the evidence to back up moves to dissolve the Labor-affiliated council.
It follows an extensive investigation by the Crime and Corruption Commission which has led to 15 people with council links, including two mayors and two chief executives, being charged with 73 offences.
"The documentation is filled with accusations, falsehoods and material which has little or no foundation and has not been tested by a court," Mr Wendt told reporters on Wednesday.
On Tuesday, the besieged council lodged a request with the Brisbane Supreme Court to overturn a second notice issued by Mr Hinchliffe, which asked it to show why it should not be sacked.
It argues the minister does not have the jurisdiction to sack or dismiss councils or individual councillors.
Council has until Friday to respond to the notice, but Mr Wendt said it wasn't enough time, insisting legal action was in the best interest of ratepayers.
Mr Hinchliffe shot back, accusing the council of hiding behind legal proceedings and deliberately stalling his decision to sack elected officials.
"I will not hesitate to use any powers at my disposal, or seek new powers if necessary, to ensure council is able to serve the Ipswich community and its best interests," he said.
Veteran councillor Paul Tully said the decision to take legal action was unanimous based on legal advice that it had a defendable case.
He declined to detail how Mr Hinchliffe had breached process or what aspect of the notice was being challenged.
"We're taking it all the way because our legal advice is that we have a very strong and arguable case," he said.
Initial submissions will be heard before the Supreme Court on Thursday.
It was revealed last week the council had used taxpayer funds to take out independent insurance to cover legal costs for its councillors and staff, despite already being covered by the Local Government Association of Queensland's scheme.
Liberal National Party Leader Deb Frecklington blamed the state government for the saga, saying it could have been avoided had it acted sooner.
Administrators will be brought in to run the council if it is sacked, with the next election due in March 2020.
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