West Sussex County Council is facing a fine of more than £1 milllion unless action is taken to cut bed blocking.
MPs last night passed the controversial Community Care Bill - which leaves councils facing fines of up to £120 for each night an elderly patient spends in hospital "unnecessarily".
Brighton and Hove has estimated it will face fines of £1m per year, while East Sussex County Council puts the figure at £2.5m per year under current figures for delayed discharges.
West Sussex County Council has yet to calculate how badly it would be hit.
But the figure is certain to exceed £1m as it is responsible for looking after a greater number of elderly people than Brighton and Hove.
Kemp Town MP Des Turner said the council was working hard to tackle the problem of elderly people taking-up hospital beds after they are fit to be discharged. The Labour MP asked for "clemency" while the council tried to address these issues. This would mean delaying the introduction of the fines, which are due to be enforced in the spring.
Dr Turner spoke out as Dr Turner told the Commons he wanted to make a plea "for clemency for local authorities such as mine, which have been doing their damnedest to do exactly what the Government have asked.
The Government has announced that social services would get an extra £100 million for each of the next three years in a bid to help them end hospital bed-blocking.
But Health Secretary Alan Milburnhas remained defiant on the principle of fines.
He said: "In too many cases, patients are delayed in hospital because social services departments are not fulfilling their responsibilities."
The Bill completed its Third Reading in the Commons last night. It will now be considered by the House of Lords.
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