The surprise resignation of Brighton and Hove City Council chief executive David Panter could cost taxpayers more than £200,000.

Councillors were shocked by the news, revealed in The Argus yesterday, that Mr Panter was taking up a health service job in Australia.

Only last year he persuaded councillors to award him a £25,000 pay rise, taking his salary to £145,000.

That was still lower than the £200,000 offered by Bradford Metropolitan Borough Council, the £180,000 paid to Kent's Mike Pitt and West Sussex County Council chief Paul Rigg's £150,000.

Now some members fear they will have to hike the chief executive's salary even higher to tempt a high-quality replacement.

Councillor Keith Taylor, convenor of the Green group, said: "I was one of the people who supported his pay rise last year, which was entirely pragmatic - to advertise for a replacement would have cost us another £60,000.

"Looking around at the latest salaries for chief executives, you would think the starting salary here would be more than we were increasing David's to - perhaps, say, £180,000 to £200,000.

"It's going to be expensive for us to replace David, more so than for increasing the pay for someone already in the job.

"David has done a good job and we're sad that despite paying him the highest salary a chief executive has ever earnt here, he didn't feel able to stay with us."

But council leader Ken Bodfish said: "I don't think this is a matter of money. We've never had any disputes with David over the salary he received.

"Some local authorities pay much more than we do.

"Some are paying up to £200,000 a year and we've never done that. We will pay the new chief executive the going rate. I will get the advice of consultants. Surrey County Council have been advertising for a chief executive recently and my guess is they're offering between £150,000 and £200,000."

Mr Panter broke the news to colleagues yesterday morning, hours after arriving back after a week in Adelaide.

He accepted the job of chief executive of the newly-formed Central Northern Adelaide Health Service last Friday after being headhunted.

He expects to move to Australia next month. Deputy chief executive Alan McCarthy will take control while a replacement is recruited.

Coun Bodfish said: "We've benefited from one of the most forward-thinking chief executives in the country. Good luck to him. I hope he enjoys the sunshine."

Conservative group leader Garry Peltzer Dunn said: "Fairly recently he was talking to me about getting on in the world and always looking for fresh opportunities and challenges.

"The suddenness is a surprise but the move isn't for a man of such ambition."

Liberal Democrat group leader Paul Elgood said: "David Panter's major contribution to the city is to have got the finances under much tighter control.

"We now need to ensure a suitable replacement is recruited."

Tony Mernagh, executive director of the Brighton and Hove Economic Partnership, said: "He has guided the local authority through some very difficult times."

Simon Fanshawe, chairman of the economic partnership, said: "David's always prepared to go and see how the people on the front line of service delivery are getting on.

"He has also been a very visible gay man, which has been a tremendous boost for gay people in the city.

"He has been a great role model."