THE council tax rise in one Teesside town could be even bigger than last year's inflation-busting 4.5 per cent increase.

The warning came from the Mayor of Hartlepool, Stuart Drummond, who also predicted 2004 would see improvements to the town, including a £500m business development creating hundreds of jobs.

Mr Drummond made his comments while talking to The Northern Echo about his hopes for the future.

He said that one of the low moments over the past 12 months had been the 4.5 per cent council tax rise. He said that he had wanted a 3.5 per cent increase, but was forced to accept the higher figure.

He said that next year's increase could be even higher because the council will receive only a £500,000 increase from the Government for next year's budget.

At the same time, there is likely to be a big rise in the Cleveland Police Authority precept. Some council officers have argued for a 12.9 per cent increase.

Other low moments of last year for Mr Drummond included losing chief executive Brian Dinsdale and other senior staff to Ray Mallon's Middlesbrough Council.

However, Mr Drummond was pleased that Hartlepool Borough Council had jumped up the Government's excellence ratings to third nationally. That means that Hartlepool is the best-run council in the North-East, according to the Government ratings.

Next year he believes he will be able to return coastguards to Seaton Carew beach where an eight-year-old boy, from Hartlepool, died in the summer.

He is also forecasting that the business, leisure and commercial development at Victoria Harbour will go a long way to regenerating the town.

It is expected the development, on 200 acres of land, will create up to 1,000 jobs and will include a new bridge linking Hartlepool Marina to the historic Headland area of town, a new leisure centre and swimming pool and more than 3,000 residential properties.

"The Victoria Harbour programme is particularly exciting and I will be pushing very, very strongly for the coastguards to be returned to Seaton Carew," he said.