A mayor has warned that a big rise in his town's council tax is inevitable in the coming years.

Stuart Drummond, the mayor of Hartlepool, made his comments on Monday at a borough council cabinet meeting to discuss next year's budget.

He told his cabinet that it would be wrong to hide the financial problems facing the borough ahead of next year's elections.

The cabinet discussed a number of options for setting next year's budget and council tax increase.

Council officers warned that Local Government Minister Nick Raynsford had told local authorities that the Government was prepared to cap high-spending councils.

Most of the debate centred on two options, one of which was to increase tax by 4.5 per cent to about £1,095 for owners of band D houses.

The other option being considered is to increase tax by 8.9 per cent to £1,141 for band D houses.

Mr Drummond told the meeting at Hartlepool Civic Centre that council tax had to increase substantially at some point.

He said: "We need to make clear to the people that there will be a hike in the rate.

"If we try to hide that, then we are not doing our job.

"I don't think we should recommend any option at this stage. We should have a serious consultation with the public and get real feedback.

"We would not be capped by the Government if we took the second option... I don't want our services to be drastically reduced and people to lose their jobs."

Some councillors argued that cuts should be made to keep down the council tax rate.

Mr Drummond acknowledged that the councillors faced election in June next year but said that should not be a consideration in setting the budget.