Nick Raynsford wants councils to "budget prudently"

Graham Allen, for Nottingham North, has accused the government of making an example of his council in the run-up to the 2005 elections.

But local government minister Nick Raynsford insists he has had to be firm with all councils.

"We are keeping our promise to act on high council tax increases," he said.

Torbay, Herefordshire, Nottingham, Shepway, Fenland local authorities and Hereford & Worcester Fire Authority had their proposed spending cut.

They are playing games with people in Nottingham North and elsewhere Graham Allen MP

Mr Allen told BBC Radio 4's Today programme: "Nottingham undoubtedly was over the government's limits but when we found out we were in this Kafka-esque local government finance situation we wanted to comply.

"We were only �180,000 over the limit on a �330m budget but what we're now being forced to do is re-bill all the people in Nottingham and that's going to cost us �250,000. It's a farce.

"I think the real reason is that the government needed a Labour council on the list because there are only Conservative and Liberal Democrat councils and they wanted to appear even-handed."

He added: "They are playing games with people in Nottingham North and elsewhere which are among the most deprived areas in the United Kingdom."

Single figures

Mr Raynsford replied: "We are not pleased to be capping local authorities. We want to see them take responsibility for budgeting prudently and keeping their council tax demands low.

"Unfortunately, last year we saw very large council tax increases, averaging 12.9% and that's why the government had to issue advance warning to all councils saying that if they didn't meet our expectation of keeping their increases in low single figures, we would have no option but to use our capping powers.