Devon council tax payers face a rise of up to 20% or drastic cuts in services this year.

The forecast from the county council came as a war of words erupted with the government over funding for local authorities.

The county council needs to find �32.5m to finance its spending plans of more than �500m, despite lobbying ministers for a better deal.

Average council tax bills in the county could top �1,000 for the first time in order to bridge the funding gap.

Losing out

Brian Greenslade, deputy leader of Devon County Council, said: "We feel pretty let down and I feel pretty bad for the people of Devon because of the threat of losing services or a high rise in council tax."

He said Devon was one of many authorities in the South which had lost out to those in the North.

Mr Greenslade said: "Last summer we warned that the trend of the government was to switch money from the South to the North of England - and we have lost �18m on that alone."

The government had also cut �8m from the county's road budget, which alone would mean a 4% rise in council taxes.

COUNCIL TAX

Devon is actually getting a very generous deal from government Ben Bradshaw MP

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But Exeter MP Ben Bradshaw, responding on behalf of the government, pointed out that overall funding to the county council had increased by �15m.

And he said there was no justification for unreasonably big tax rises.

"I think council tax payers in Devon are fed up with this annual ritual of Devon County Council saying it's not getting enough money from central government, when its actually getting a very generous deal from government.

"Then it whacks the council tax up."

The county council is also facing pressure to increase its spending on Devon and Cornwall police.

The police authority wants an increase in its budget to finance 400 new officers.

But the government settlement is for just �39,000 extra.

Cornwall, which faces a �35m shortfall, is expected to increase council tax by 8%.

Council leaders around the West Country will be meeting over the next few weeks to set their budgets.