Brighton and Hove looks set to escape council tax capping by Deputy Prime Minister John Prescott.

Mr Prescott is expected to spare the authority in an official announcement later this week - even though it ignored his demand for "low single-figure" council tax increases.

Council leaders voted through an increase of 7.7 per cent after initially threatening a double-figure rise, bringing the total bill for the average Band D home to £1,162 a year.

Mr Prescott had warned the council it was on a "hit list" of 65 authorities being considered for capping.

Leaders reacted by cutting millions of pounds from budgets to limit the increase.

Mr Prescott is due to make a statement to Parliament on Thursday saying which local authorities will be capped.

His office refused to name in advance the councils and police and fire authorities which will have their budgets cut.

But according to speculation at Westminster, he will take action against six councils, three police forces and five fire brigades.

The councils are expected to be Herefordshire, Nottingham, Telford and Wrekin, Torbay, Fenland and Shepway.

The predicted police forces are Cumbria, Northamptonshire and West Mercia. The fire services are expected to be named as Bedfordshire, Durham, Essex, Hereford and Worcester and Nottinghamshire.

The prospect of capping had left finance bosses in Brighton and Hove facing a huge bureaucratic headache.

They would have had to send new bills to every household explaining the decision and giving a new total payment.

Direct debits for residents who pay monthly would have had to be adjusted, while any householder who had paid the total up front would have been entitled to a rebate.

The cost of sending new bills could have run to thousands of pounds.

The authority would then have had to decide where to make savings on tight budgets.

The Local Government Association has urged Mr Prescott to resist capping altogether.

Chairman Sir Jeremy Beecham said: "A thorough and fair examination of the figures this year should lead even the advocates of capping to decide against it.

"The costs of rebilling and the disruption in local financial planning will fall back on the council tax payer."

The Office of the Deputy Prime Minister said it would not comment on "speculation".

Labour finance councillor Simon Burgess said: "Assuming the speculation is correct, we are glad there has been some recognition of the fact we had a particularly difficult settlement.

"In the light of that, the increase was not excessive. We worked very hard and found savings of £6.5 million."