The tram is pitched to be up and running by 2007

The Labour group has proposed a budget including a 3.8% council tax rise.

They say there would be no cuts in services, but that they would save �1.5m by axing the tram project with South Gloucestershire Council.

The budget agreed by the Cabinet earlier in February includes a Lib Dem-sponsored 5.9% council tax rise.

The Conservatives have now mooted a 4.4% rise, saying they would make savings by not undertaking "further preparatory work" on the tram project.

Necessary government funding is contingent on this work, which entails more feasibility studies.

Bristolians would not thank is for throwing more taxpayers' money down the drain on a tram which looks increasingly unlikely to see the light of day Richard Eddy Conservative councillor

Work on the tram, which would run from the city centre to Parkway in the north east, has yet to start.

Peter Hammond, deputy leader of the council and a Labour councillor, told the BBC: "We think the 5.9% proposal is outrageous.

"We want to give the monies back to Bristolians that they have paid out in the past.

"The reality of the tram is simple: the government is not prepared to give us the go-ahead until we have done further studies, and even then, it won't guarantee for us to proceed.

"It is moving away from trams and looking at other alternatives and we have to be realistic."

Full meeting

The Conservatives responded by suggesting a cut of �1.84m from planned spending.

As well as scrapping the studies into the tram, they would axe the council's Equality Unit and sell the South Liberty site in Long Ashton, earmarked for travellers.

Conservative councillor Richard Eddy said: "Bristolians would not thank is for throwing yet more taxpayers' money down the drain on a tram which looks increasingly unlikely to see the light of day."

The budget will be voted on at a full council meeting on 2 March.