Residents are facing a huge hike in council tax to pay for Brighton and Hove's bins fiasco.

David Panter, chief executive of Brighton and Hove City Council, was today warning the cost of running its own waste collection and street cleaning service would mean a big increase in council spending.

Members of the council's policy and resources committee were meeting today and were expected to confirm the Cabinet's decision to reject an offer by Serviceteam to run the service and transfer it in-house.

Mr Panter, who took over the running of the council less than a fortnight ago, has forecast the decision will cost the authority an extra £1.5 million by March.

In a report to today's meeting, he said it would be cheaper for the waste service to be run by the council than by Serviceteam.

But he said: "In either scenario, the service would be one of the most expensive in the country."

He said savings would have to be found from other services. Next year's budget of more than £7 million for street cleaning and refuse collection would have to increase by £4.65 million.

Mr Panter said councillors would have to consider the level of council tax increase and savings they would need to make to achieve a balanced budget.

The possibility of a legal challenge to the council's decision could not be ruled out.

The council faces a tough task of transferring the service by next week.

It will try to improve the service, install strong management, liaise properly with the workforce, make sure the equipment is available and improve the poor condition of the depot.

An interim management team of council officers is being set up.

Binmen were told of the council's plans to take over the service on Wednesday.

Workers leaving the Hollingdean depot said council leader Ken Bodfish had told them council tax would have to increase.

Last week, Paul Elgood, leader of the Lib Dem group, predicted a 30 per cent rise in council tax if Serviceteam took over.

Conservative leader Brian Oxley said he had warned taxpayers would suffer from the mishandling of the waste contract.

He said: "The suggestion of increasing council tax again will not be received well by taxpayers."