COUNTY Durham's fire brigade could face budget cuts next year after falling foul of the Government over its council tax increase.

The County Durham and Darlington Fire and Rescue Service will not be capped this year for breaking the Government's order for local authorities to keep council tax rises in low single figures.

Five councils and another fire authority have been capped and will have to cut their spending to Government-set levels.

But it has been 'nominated' and had a notional budget set for it for this year that is £770,000 lower than the £26.8m it plans to spend. The move is designed to prevent it from levying a council tax increase and approving a budget that the Government considers unwarranted.

The measure is also being applied to three other fire brigades, a police force and a council.

A spokeswoman said the brigade would take up the option of challenging the decision, which was announced last Friday by Local Government Minister Nick Raynsford.

The spokeswoman said the move would not affect this year's plans but it would be taken into account in preparing for next year's budget.

She added that it was hoped the situation would not impact on emergency services.

She said: "At the moment our priority is front line services and we'll keep that as our priority. We will obviously have to look at the usual budget-setting process but we can be prudent and take a sensible approach and the impact will be minimal.

"We have 21 days to challenge the decision and we will be taking that forward."

Until April the fire service's spending was included in the overall budget for Durham County Council.

But it now appears as a separate item on council tax bills and its share of the bill was said to have increased by 20 per cent.

Mr Raynsford said: "Nomination is not a soft option. The nominated authorities have a clear message for next year - rein in your budgets next year, or face capping. I want taxpayers to be reassured that they should not face excessive tax increases next year.

He said that the announcement shows all authorities that the Government means business.

Mr Raynsford added: "We have increased funding to local government by 30 per cent since 1997.

"There is simply no justification for excessive tax increases and, as we have shown, we will take action where excessive increases are set.

"We hope that all authorities will take this message on board by setting prudent and reasonable council tax increases next year."