Mr Raynsford is getting tough on local councils

Local Government Minister Nick Raynsford says he has written to 31 councils who he believes may be planning hikes of more than 5%.

Tony Blair has warned there is "no justification" for big rises this year.

Mr Raynsford told the BBC's Today programme: "I have got capping powers. We will use those powers if necessary."

'Written warning'

The minister admitted taking the tough line just a day after the Local Government Association outlined a number of proposals for major changes to the way councils raise money.

In an interview with the Financial Times, Mr Raynsford indicated that business could in future be expected to pay more into local government coffers.

Council tax explained In graphics

Ministers are considering a range of options for a shake-up of the way local authorities raise cash, including reform of the council tax and doing away with it.

Speaking on BBC Radio 4's Today programme, Mr Raynsford was quizzed about the FT report which suggested he was threatening to cap councils that could be planning spending increases.

"The FT is right that I have written to 31 councils from whom we have got information suggesting that they may be contemplating increases in council tax of above 5%," he told Today.

Keeping mum

But the minister said, he hoped this action would not be necessary.

"This is just a preliminary letter and I hope as a result of it, councils that are considering a large increase in council tax will moderate their proposals."

We don't want to be in the business of naming and shaming Spokeswoman for the Office of the Deputy Prime Minister

However, a spokeswoman for the Office of the Deputy Prime Minister said it had no plans to release the identity of the 31 councils who received letters.

"We don't want to be in the business of naming and shaming," she told BBC News Online.

"The figures haven't been set yet by the councils and we won't announce names until those rises have been set.

"Negotiations and consultations are going on and we don't think it is fair to be putting those names out in public.

"Obviously, if the councils themselves want to make the letters public, that is up to them. We have no issue with that."