Nick Raynsford rejected Torbay's appeal against capping

Local Government Minister Nick Raynsford made the announcement, insisting there was "no excuse" for excessive council tax hikes.

The decision was announced on Thursday, despite an appeal by the Devon authority last month.

The council described the decision as "a kick in the teeth" and says it will have to spend �100,000 reissuing bills.

Torbay Council is one of five local authorities and one fire authority to be capped.

The others are Herefordshire, Nottingham, Shepway, Fenland and Hereford & Worcester Fire Authority.

Nick Raynsford says the move ensures the government is keeping its promises to act on high council tax increases.

The nominated authorities have a clear message for next year - rein in your budgets of face capping. Nick Raynsford, Local Government Minister

He has set the unitary authority's budget at just under �140m. Torbay's 9.9% rise in council tax was the largest of any authority in Devon and went against government guidelines to set increases of " low single figures".

In April the council was told to reduce the size of the increase to 8.5%. It appealed and asked the government to set a restricted budget for next year instead, Nick Raynsford has rejected that appeal.

Subject to approval from the House of Commons, the local authorities being capped this year will now need to issue revised bills.

Limited increases

Mr Raynsford has also acted to limit any increases next year by several other authorities.

He said the move was "no soft option", adding: "The nominated authorities have a clear message for next year - rein in your budgets or face capping."

The minister says he wants taxpayers reassured that they should not face excessive tax increases next year, saying there was no justification for them.