Council tax explained In graphics

Local government minister Nick Raynsford said the 4.7% rise in funding meant authorities would have no excuse to introduce double figure tax hikes.

The Treasury has predicted the average household tax bill will rise 7%.

But council leaders warn they could be higher because of 30% rises in social services and residential elderly care costs.

REGIONAL FUNDING INCREASES South West: 4.6% South East: 4.7% London: 4.7% East: 4.9% East Midlands: 5.1% West Midlands: 5.3% Yorks & Humbs: 4.4% North East: 4.3% North West: 4.6%

Ministers have protected the schools budget but have warned that any hefty council tax rises will be capped.

A shortfall in education funding caused a crisis this year, so the government is guaranteeing that schools funding will rise by 4%.

Capping powers have toughened, with authorities judged to be excellent by the Audit Commission also at risk if their tax rise is deemed excessive.

£800m 'black hole'

Last week, the Local Government Association warned of a crisis which could spark huge council tax rises.

In a letter to Deputy Prime Minister John Prescott, who will make Wednesday's announcement, council leaders say there is a shortfall of £800m.

This is made up of a £300m funding gap in education, £200m in police authorities and the rest in social services, licensing and the environment.

A plan to protect pensioners from a sharp council tax hike has been abandoned by several county councils after legal advice.

The move, which would have required other tax payers to pay about £10 extra, could have led to legal action from other low-income groups, lawyers said.