Second homes are partly blamed for pushing up house prices

District councils are considering raising the amount of council tax second home owners pay from 50% to 90% under new powers granted by the government.

But even if they go ahead, 80% of the rise will automatically be siphoned off by the county council, under the Local Government Act 2003.

South Hams District Council, which includes popular holiday resorts such as Salcombe and Dartmouth, is expected to raise an extra �2m by setting its council tax for its 4,700 second homes at 90%.

There are a number of high-priority issues and affordable housing is one of them Devon County Council spokesman

But it might only see 10% of that figure, with another 10% going to the police authority.

Officials from district councils and county councils are meeting on Friday to agree where the money goes.

A county council spokesman said: "There are a number of high-priority issues and affordable housing is one of them.

"But it is not the only issue. Some of the additional revenue will go to the police authority and, from next year, the fire authority which becomes a tax setting authority as well next year."

Homes for workers

He added: "The county council and the district councils have worked together in the past on joint projects."

South Hams leader Richard Yonge said he was confident that an agreement could be thrashed out.

"It will be spent on rural issues, but principally on local housing for local people, key workers who cannot afford the very high prices, particularly in the coastal belt."

South Hams is meeting on Thursday next week to discuss raising council taxes on second homes.

It is estimated that if all Devon councils followed suit it would raise an extra �7m a year.