Taxpayers are paying more council tax to cover a local authority's losses on the stock market.

Following the economic downturn after September 11, West Sussex County Council has seen its investments in the stock market and the value of its pension fund plummet.

As a result, it increased its council tax rates for the current financial year and taxpayers face further rises in the future.

Bryan Robinson, the council's deputy county treasurer, said although the council had suffered as a result of the slump, the real effects on taxpayers were not that high.

He said: "Approximately one third of the council's expenditure is met by council tax.

"We spend £566 million each year.

"The increase arising from the slump in the stock market was an extra million pounds so out of £566 million that is not a very large percentage. It means it is costing the taxpayer £1.28 a year.

"West Sussex County Council has the fifth lowest council tax of all counties in the country.

"Council taxpayers in our area are in a good position."

It is estimated that nationally the value of council investments in the stock market during the past ten months has dropped by £5 billion.

East Sussex County Council said it has not been affected by the slump.

A spokesman said: "Our pension fund is joint fifth in the country for its performance and is fully- funded.

Council tax will not be set again until next year but we do not envisage any problems."

Andy Richards, chairman of public service union Unison in Brighton and Hove, said: "It is something that we are concerned and worried about.

"I think the Government needs to step in and do something to make sure people are not losing out.

"It is likely that taxpayers will foot the bill because council workers are public employees."