Welcome to A2A, grylls12.
Depending on where you live, you might be able to find financial counselling services that can help with this situation. If not, then you should discuss the situation with your bank. It is important to get the situation documented.
You will need to take control. It is a concern that you are accepting the situation that she will ring the council for example. You need to do things like that yourself, regardless of what she says, and regardless of what she does.
You will need to have a clear, written agreement about money and accounts, and how money coming in will be divided between each person's account (you certainly should not have joint accounts). Each person's expenses should come from that person's account. You should take charge of payments.
I'm afraid, though, that it seems to me unlikely that there will be a satisfactory resolution. If she will not admit the problem then separation may be the only option.