A council could find its council tax capped by the Government after announcing a likely increase of 8.4 per cent.

Local authorities have been warned by Nick Raynsford, the Local Government Minister, that they face spending caps if council tax is increased by more than a low single figure per cent.

Referring to Darlington Borough Council's intended increase, a spokeswoman for the Office of the Deputy Prime Minister said yesterday: "The minister has reiterated time and time again that he considers reasonable council tax rises to be in low single figures and those that aren't will be capped.

"Eight point four per cent is not low single figures."

She said Mr Raynsford would decide which authorities to cap after all councils had sent in their budgets in March and would take into consideration the previous year's increase.

North Yorkshire and Northumberland county councils were two of the authorities which received warning letters from Mr Raynsford last year.

North Yorkshire is planning a rise of 5.75 per cent, half last year's increase, while Northumberland expects bills to rise by about six per cent.

Darlington's council tax has risen by 50 per cent since it became a unitary authority in 1997, but remains the lowest in the region. The national average increase since 1997 is 71.6 per cent.

In areas where authorities are capped, taxpayers will receive a rebate by paying less throughout the year.

Paul Wildsmith, Darlington's corporate services director, said the possibility of capping was a concern.

But he added: "We believe we have got a strong argument not to be capped.

"We are not even spending at the level the Government suggests for councils at the moment. We are not an excessive spender and based on that, and the fact that we are the lowest in the region, we don't believe he will cap us.

"This isn't just about money, it's about providing services to the public. If they say we cannot increase council tax, they cannot then say the next day, 'you aren't providing adequate services'."

As well as the council tax increase, Darlington's cabinet will be asked next week to approve new town centre car parking charges.

The proposal is to introduce a £1-an-hour charge on roads where waiting restrictions apply.

Mr Wildsmith said: "That income helps us keep our council tax down to a level. But we are not just charging for the purpose of raising income."

David Maddison, of the Local Government Association, said the pressure on authorities to keep council tax down but spend at certain levels inevitably resulted in extra charges for the public.

"If you cannot raise the money through one route then you have got to look at all possible options," he said.

"Looking at fees and charges is one option but it can only raise a limited amount.

"We continue to be against capping. Approval or disapproval of budgets should be left to the local electorate."