Homeowners and tenants across Sussex face huge council tax rises under controversial new plans.

A leaked Government report reveals proposals to shake up the council tax system which would lead to some people being charged more than £6,000 a year.

Pensioners and those living in the poorest areas would have their bills slashed or even scrapped altogether but those with properties worth more than £170,000 would find themselves paying extra.

The proposals are aimed at making poorer homeowners better off but high property prices in Sussex would lead to many in the county being among the worst-hit by the new system.

The Balance of Funding Review report, officially released tomorrow, suggests the eight council tax bands, which were based on 1991 house prices, should be revamped to bring them into line with today's housing market.

The reforms would create ten bands, with band D properties, worth between £68,001 and £88,000 under the current system, being reclassified as worth between £130,000 and £170,000.

Band D taxes would remain the same at an average of £1,167.

People in homes worth less than £130,000 would pay lower taxes and the elderly and those on benefits would also gain from rebates accompanying the changes.

People owning properties worth up to £40,000 would see charges drop from £782 to £259 and charges for those with homes worth between £40,000 and £80,000 would drop to £584.

Homes worth more than £170,000 would bear the brunt of the increases, with people in Band H seeing their bills rise from £2,234 to £6,224 - an increase of almost 300 per cent.

According to mortgage lender Halifax, the value of the average home is £219,454 in Brighton and Hove and £215,011 in East Sussex, which would lead to an average increase in council tax of £132.

In West Sussex, the average is even higher at £247,747, which would lead to a rise of £395 on top of the annual tax increments.

Daniel Sadler, 30, who is due to move into a £250,000 two-bedroom house in Kemp Town, Brighton, next month, said the proposals would seriously stretch his budget.

The Gatwick aircraft dispatcher said: "My understanding was the Labour Government was enforcing capping on local councils. This would turn that idea on its head.

"If there was an improvement in services, I could understand an increase. But this will cause quite an uproar.

"At the moment, with the way house prices are, the move up into the £250,000 price bracket is difficult - that's your second or third purchase.

"For your first house, you will have really stretched to get into it. People in normal circumstances and with no huge income will have have begged, borrowed and stolen."

Nick Gibb, Tory MP for Bognor and Littlehampton, said: "The tax system is not related to income. It does not take account of the fact there are pensioners with fixed incomes who may have a large house but do not have large incomes to meet higher taxes."

Bob Carden, Labour Brighton and Hove city councillor for Portslade North, said the banding system needed to be updated but Sussex would be hit hard.

He said: "Our house prices have risen well above the rate of inflation. I hope the Government takes that into account."