Ministers have sought to reassure Council Tax payers that they will not face massive increases when all homes in England are re-valued for the tax in 2005.

Under the proposals, revised council tax bills will be issued in 2007 and will be re-calculated every 10 years.

Council tax is currently based on 1991 prices which have become outdated as property prices soar, particularly in London and the south east.

Local Government Minister Nick Raynsford stressed that the revaluations would not lead to a greater overall council tax yield.

Up to date

"Regular revaluations will ensure that the council tax burden is distributed fairly on a basis of more up to date property values," he said.

"Setting out a timetable for revaluations gives local authorities a clear timetable and framework within which to make their financial plans."

A spokesman for the Department of Transport, Local Government and the Regions said: "Most property prices have actually gone up so we will obviously have to look at changing what each band is.

"Council tax will go up for some, but it will also go down for a lot of people."

This year, the average Council Tax in England rose by more than double the rate of inflation.

Council tax was introduced after the downfall of Margaret Thatcher as prime minister in 1990.

Poll tax

It replaced the controversial and unpopular Community Charge - universally known as the poll tax - which levied the same rate on members of the population regardless of their wealth.

Under the council tax, properties are placed in one of eight valuation bands and the amount payable depends on the value of the property.

Most homes in England are in bands A-C and the average council tax will be �740 in 2001-2002, an increase of 6.2% from the current level.