£1,000 council tax for six boroughs

Average council tax bills in at least six London boroughs could top £1,000 next year.

New government grant levels for local authorities are likely to mean London bills will rise by about 5.2 per cent, or £44, on an average Band D figure of £841.

But some councils are unlikely to be able to keep under the £1,000 mark - deemed a politically sensitive milestone .

Liberal Democrat-run Richmond-on-Thames, which has the third highest council tax in the country, is already on £998 a year for a Band D house.

Haringey, Havering, Hounslow, Merton and Camden are also above the £950 mark, while a further six are above £900.

Crisis-hit Hackney, which has a current Band D rate of £922 and is already facing savage cuts to service its £50million debt, has already warned that it will have to raise rates by at least 10 per cent next year.

Eric Ollerenshaw, a Tory councillor on the Labour-run borough, said: "Whatever the terms of this settlement, Mr and Mrs Hackney will be paying £1,000 bills." He added that the bill would be even higher once Mayor Ken Livingstone added his precept for spending on the police, fire and Greater London Assembly budgets, which some predict could be an additional £60.

Merrick Cockell, leader of Tory-run Kensington and Chelsea council, claimed the rise there was only 3.6 per cent, which he said would leave the council £13million worse off. Mr Cockell said: "In the meantime, we have tens of thousands of extra people who need school places, social work, refuse collectionand a hundred other different-services which have to be paid for."

But town halls of all political persuasions expressed relief at the decision by local government minister Stephen Byers not to use a new earningsrelated formula that could have seen some bills rise by up to £170 a year.

London will receive an extra £402million - an above-inflation increase - from the Government. Minister for London Nick Raynsford said the settlement was "generous enough" to stop large council tax increases.