EAST Lancashire Councils have been warned against large council tax increases after being given extra Government cash.

Councils across Britain have been told they will be given an extra £2.1billion for 2004/2005, an increase of 4.7 per cent on last year's allocation.

But Local Government minister Nick Raynsford told the House of Commons yesterday that councils would have to limit council tax increases or face being capped.

He said the Government would give councils greater flexibility over their budgets in return for greater efficiency.

Rises will have to be "reasonable" but the Government did not define what levels would be acceptable.

Mr Raynsford said: "Against the background of further substantial increases in grants and the extension of freedoms to local authorities, large council tax increases are simply not acceptable. They should be aware that the Government will be looking at next year's council tax rises very closely."

This year council tax bills in Blackburn and Darwen rose by 9.5 per cent, despite the council receiving an extra £12million in Government money. Homes in the Ribble Valley also paid 9.5 per cent more this year.

In Hyndburn and Burnley, bills grew by 9.2 per cent, Pendle people saw their bills rise by 9.7 per cent, while in Rossendale, which was placed at the bottom of a national league table of councils, residents were asked to pay 11.1 per cent more.

Donna Hall, executive director of corporate resources for Blackburn with Darwen Council said: "The council is as keen to keep levels of tax down as the Government.

"We increased council tax by 8.9 per cent last year, the national average increase in council tax was over 12 per cent. The council has a good record of financial management and we constantly strive to ensure value for money."

A Lancashire County Council spokesman said it was too early to comment.