Rising council tax bills have seen protests around the country

John Prescott told BBC1's Breakfast with Frost rises should be in "low single figures".

"There is a bit of limbo dancing still going on. But make no mistake, if you don't get under that line I am going to cap," he said.

Ministers are currently reviewing the system of local government financing.

A recent survey by The Times suggests council tax will rise by an average of 7% this year, but the final figures will only be known next month.

[Elizabeth Winkfield] must be aware that it is not very sensible to try to encourage people to break the law Nick Raynsford, Local Government Minister

Mr Prescott acknowledged there would have to be changes to the system.

"You have got to find a greater consensus than you have got at the moment. The poll tax taught us that," he said.

A council proposing a 33% hike was among 11 called last week to meet Local Government Minister Nick Raynsford.

Mr Raynsford described the talks as "constructive" and was optimistic many councils would revise their plans.

But pensioner groups are planning mass rallies against the rises, with some prepared to be jailed for non-payment.

I've been getting letters from people and telephone calls telling me I'm a hero Elizabeth Winkfield

Speaking on Sky News, Mr Raynsford warned an elderly Devon woman due in court for refusing to pay her council tax that she must obey the law.

Elizabeth Winkfield owes Torridge District Council �98.80 and is appearing before Barnstable magistrates on Thursday.

The 83-year-old was faced with a council tax rise of almost 18% last year, but decided to pay only an extra 2.5%.

Mr Raynsford told the Sunday with Adam Boulton programme: "It is a fairly straightforward principle of any democratic society that people have to obey the law.

"I believe this is a case where it is important that she is approached in a sensitive way but she must be aware that it is not very sensible to try to encourage people to break the law."

Ms Winkfield, of Westward Ho!, has no other income than her state pension and says she cannot afford to pay the �747.81 council tax bill for her Band C home.

Massive reaction

Asked whether she was prepared to go to prison over her protest she said "we will have to wait and see".

She told Breakfast with Frost she could not believe the massive media reaction to her case.

"I never thought it would get to this stage," she said.

"I just thought maybe a few local people would be at the court to see me, or maybe nobody.

"I've been getting letters from people and telephone calls telling me I'm a hero and all I've said is that I'm not paying. I'm not going to because it's not right."

Asked whether she had seen the inside of a prison she replied she had only read about them or seen them on television.

"I never dreamt I'd be likely to get anywhere near one," she said.