Ministers have been accused of starving councils of cash

The estimates have come from the Scottish Parliament's finance committee, which expects the outcome to be between the two figures.

Councils faced a deficit of nearly �85m, in addition to a target of �58m in efficiency savings, MSPs said.

They would have either to raise taxes or cut services, the committee added.

Opposition criticism

"If the gap was met entirely from council tax, it would imply increases of the order of 6.6%," its report said.

"The executive's target is 2.5% and the committee thinks that the reality will be somewhere between the two figures on current assumptions."

A "significant" fact was the different way that local government was being treated in the executive's efficiency drive.

Executive departments have been asked to make fewer efficiency savings than both local government and the NHS, the committee said.

We are asking the executive to look again at its approach of imposing budget cuts in areas which affect frontline services Des McNulty Finance committee convener

They can also reinvest the savings, while some local government economies are taken away from council budgets.

Committee convener Des McNulty said: "We have raised questions over whether the delivery of efficiency savings can be properly monitored and over the inequitable treatment of local government.

"We are asking the executive to look again at the efficiency savings it has set for its own departments and at its approach of imposing budget cuts in areas which affect frontline services, such as local government and health.

"It is clear that, in terms of cash releasing savings, local government appears to be contributing 10 times more in percentage terms that the enterprise and lifelong learning department ... and double that being contributed by transport."

There is a huge black hole between what the executive says the councils should raise in council tax and what it says they should spend Derek Brownlee Conservative

Scottish National Party finance spokesman John Swinney said: "This government will be responsible for either punishing council tax payers yet again or inflicting drastic cuts in vital public services.

"Instead of sticking its head in the sand - the government should respond positively to the strong, unanimous criticism of the Finance Committee and deliver financial help to local authorities and prevent further pain for council taxpayers in Scotland."

Conservative finance spokesman Derek Brownlee said: "There is a huge black hole between what the executive says the councils should raise in council tax and what it says they should spend.

"The executive is asking local councils to make efficiency savings that it does not require from its own departments.

"The impact is that this shortfall will lead to either an increase in council tax or cuts in public services."