SPECULATION that council tax bills could rise by almost 50 per cent after homes are revalued was last night dismissed as premature by finance bosses in the North-East.

Research by the Society of County Treasurers for the County Councils Network (CCN) claims to show how Government grants will shift after the revaluation is carried out.

Several options are being considered in a review of local government taxation and the new report suggests different parts of the country will lose out depending on which method is used.

The North-East is most likely to be hit if the current system with eight council tax bands is retained and there is no introduction of regional banding to take account of property price differences throughout the country.

But, if additional bands were introduced at the top and bottom of the system, and with the region's low-cost housing, council tax yield would fall and grants would go up.

Councils in the North-East are likely to support extra bands when the Government consults with them over the revaluation, which is due to come into effect in 2007.

Newcastle City Council's treasurer, Paul Woods, said: "We'd like a ten-band council tax. Three fifths of our properties are in Band A and we feel there needs to be a greater degree of differentiation."

Mike Ward, the director of finance at Hartlepool Borough Council, where 67 per cent of the properties are in the low- est category, also supports another band at the bottom of the scale.

He said: "There is significant potential for unusual changes in the levels of council tax across the country, but what they will be we don't know yet.

"It is a very unclear situation at the moment and we don't know what the answers are going to be.

"Anyone who comes out with any figures is making very large assumptions around very large numbers indeed.

"The one thing that can be guaranteed is that they will be wrong - we just don't know by how much."