The Gilroes Crematorium, which carries out 3,200 cremations every year, may increase the fee from 500 to 610 pounds this year.
The increase is to be in the form of an "environmental levy" which the council thinks will help to off-set its plan to replace the four cremators installed in 2000 and to increase chapel seating capacity.
The new equipment will reduce mercury emissions, which come from the tooth fillings of those cremated. The government recently issued legislation on the need to cut crematorium mercury emissions in half by 2012. The full cost of the improvements has been put at 4.2 million pounds.
There are fears that because cremation is required in Hindu and Jain religions, and preferred by Sikhs, their communities will be disproportionately affected.
Parmjit Sngh Gill, a city councillor, told Leicester Mercury: "There hasn't been enough consultation on this price rise. I do think that some faith groups will be particularly affected by these rises." Mukesh Naker, from Leicester-based pressure group British Hindu Voice, said: "Cremation rites are an important and integral part of Hindu, Sikh and Jain custom. So, such a proposal will have a massive impact on these communities.
"Despite several pledges by city councillors and officers to consult us, it now appears that a decision to push through the proposals without a formal consultation has been made. We have consistently made a positive contribution to Leicester's economic and social well-being," he said. "We feel extremely let down by the council. While we welcome improvement works to the crematorium, we feel we should not be ignored on this issue," he added.
The council's lead member for culture and leisure, Councillor Robert Wann, said the consultation was continuing. A city council spokesman said: "No decision has been made on the cremation charges. They are due to be considered by the cabinet in August."
The council says charging a levy on each funeral is fairer than using the council's capital reserves because the crematorium serves more than just the city.