Households are facing another inflation-busting rise in council tax this April for the tenth successive year since Labour took office.

A Times survey of more than 200 authorities shows that the average bill is set to rise by at least 3.8 per cent to £1,315, up £47 from last year. The figures mean that council tax will have risen by more than 90 per cent since Tony Blair came to power in 1997, with annual bills jumping from £688 to £1,315.

The lowest rises are in the 238 districts that face elections in May, weeks before Gordon Brown is expected to take over as Prime Minister.

Local government experts said that, while this was the lowest overall rise since Labour came to power, Mr Brown was merely “holding the lid on council tax” and that rises could well be steeper next year.

The latest increase, to be finalised next month, is set to provoke more protests from militant pensioners who would rather go to prison than pay another pound in council tax. Sylvia Hardy, 75, who was jailed in 2005 for refusing to pay her council bill, said that 90 pensioners in Devon were planning to withhold the tax this year, and about half were ready to be jailed.

“The increases are completely and utterly wrong,” she told The Times. “The services are going down but the taxes are going up disproportionately. All my costs are going up but my pension is being swallowed up.”

Christine Melsom, head of the IsitFair campaign against council tax rises, revealed that a massive demonstration was being planned in the next few weeks with several protest groups combining forces.

Pensioners are particularly angry because last year they were deprived of the £200 council-tax rebate that Gordon Brown introduced as a one-off in 2005, an election year.

Phil Woolas, the Local Government Minister, welcomed the relatively low rise although it is well above the Government’s preferred inflation indicator, the consumer price index, now at 2.7 per cent. The increase is also likely to rise to nearer 4 per cent as police and parish elements of the tax are added on.

Mr Woolas told The Times yesterday that his goal was to stabilise council tax at levels below inflation. “The Government has provided extra money to councils and we have provided stability in a two-year settlement. That is now being passed on to the council tax payer.”

But he also disclosed that he was writing to seven councils or police authorities who had passed the capping level of 5 per cent. Five of these are believed to be police authorities. “We will not accept excessive increases in council tax,” he said. At least one council, Tewkesbury, has already revised its from 7.8 per cent to 5 per cent to avoid being capped.

Councils said they would only be able to keep tax down by cutting social services, libraries and sports facilities. Under pressure to spend more on recycling and equal pay claims, many are reducing eligibility criteria for home care.

Tony Travers, a local government expert at the London School of Economics, said: “There is a widespread belief that council tax had reached the end of the line. Several groups of taxpayers can’t take any more and councillors, as much as the Prime Minister, do not want to risk upsetting them. All this is doing is holding the lid on but not solving long-term problems.”

Sir Michael Lyons is expected to produce his report on the future of local government finance next month, but there are fresh rumours that it might be delayed again. Any proposals such as revaluation or widened council tax bands, which would lead to tax increases for some groups, could prove politically unpalatable to the Chancellor.

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