THE North-East is about to show the lowest average council tax rise in the country - according to a survey.

Average bills in the region for the financial year from April will go up by 8.9 per cent, from £734.84 to £800.22.

Band D properties are going up £92.26, from £1,067.83 to £1,160.09 - a rise of 8.6 per cent.

Across England and Wales bills will rise by 12.9 per cent - the highest average increase since the controversial poll tax was abolished 11 years ago.

Although average bills in the North-East are going up, the largest rises are concentrated in the South, the survey by the Chartered Institute of Public Finance and Accountancy shows.

The average council tax bill in London will rocket by 18.1 per cent, up from £819.37 to £967.46. This will be closely followed by the South-East, where bills will rise by 15.8 per cent.

The Government said changes to its grant formula meant that for the first time councils were being given above-inflation increases in grants - on average 5.9 per cent - and has attacked some rises as "outrageous".

Last night, Prime Minister Tony Blair's official spokesman warned that the Government could still use special powers to cap council tax increases where they were felt not to be justified.

Critics have claimed that the new grant formula favours heartland Labour councils in the North ahead of more affluent areas such as the South-East.

Meanwhile, a number of councils in this region have already announced rises.

One of the biggest, Durham County Council, has said its bill will go up by 9.17 per cent, although this is the fourth lowest of the shire counties.

In Darlington, the average bill for council services could rise by up to six per cent - a rise to be confirmed tomorrow.