The housing boom means some could jump three council tax bands

Currently the tax is calculated using the 1991 value, but this will soon be updated to the 1 April 2005 value.

In and around London will be hit hardest, says the Lib Dem study, which uses the Halifax house price index.

Other parts of England affected are the South West, where 81% of homes outstrip the national average, and in the East.

Price bands

The government has called for a reassessment to bring charges into line with the housing market boom over the last 14 years. They will come into force on 1 April 2007.

It is claimed some homes could jump two or even three price bands - adding �600 to their bill in a year.

In the South East four out of five town have seen prices rise above the national average - Witham, Whitstable, Littlehampton, Tring, Berkhamsted, Brighton and Hove, Teddington and Hatfield have seen the biggest rises so will be the biggest council tax losers.

Bills could rocket by �300 in more than 60 regions in London and the South East, according to the Lib Dems.

In the South West, Yeovil, Redruth, St Austell, Newquay, Barnstaple, Helston and Camborne, face the biggest hikes.

London and the South East will be the hardest hit, say the Lib Dems

While in the East, two-thirds of towns have seen house prices rise above the average, with Wymondham, Diss, Stowmarket, Haverhill and Bury-St-Edmunds set to be hardest hit.

Ed Davey, Lib Dem local government spokesman, said: "Labour is set to turn the warm glow of house prices into a post-election tax time bomb.

"The government claims council tax revaluation will make the system fairer. But this research shows it will be arbitrary, random and unfair.

"People are about to be penalised for the market forces that have pushed up house prices. Revaluation is a typical Labour stealth tax.

"Millions of families will see their council tax bills rocket once the election is over but ministers have refused to come clean about it."

A spokesman for the Office of the Deputy Prime Minister said: "The system is based on 1991 values. And that isn't fair, or rational.

"Revaluation isn't about raising more money overall - we've made that quite clear. Anyone whose home has risen in value in line with averages is unlikely to pay more tax.

"We will have a transitional scheme to protect those whose property has risen by more than average. Council tax benefit is available for those who have difficulty paying.

"And we have made quite clear that we will take action against councils who set excessive rises in council tax."