Council tax bills are expected to rocket by an average £177 next financial year.

The record hike in Brighton and Hove is being predicted by the city's finance managers as necessary to plug a £14 million budget shortfall.

The levy is likely to rise by about 16.5 per cent.

People in typical Band D homes who pay £1,073 a year could pay £1,250 from April.

They paid £780 in 2000/2001.

Police and fire services costs may add to the figure, making the total hike 20 per cent.

This follows a 14.5 per cent rise in April which, with the police addition, was more than 16 per cent.

The news follows last week's announ-cement on the levels of government funding for local authorities.

The figure is based on a prediction the council will face a huge shortfall in its budget for 2004/5.

Green convenor Keith Taylor said the hike would provoke a strong reaction from taxpayers.

Either they would be priced out of the city or they might be forced to take direct action.

Councillor Taylor said: "I greet the figure with a mixture of outrage and depression.

"It is yet another kick in the teeth by the Labour Government to the people of Brighton and Hove."

Lib Dem group leader Paul Elgood said the grant settlement was disappointing and the budget would be a hard nut to crack.

He said: "Now is not the time for unnecessary political games.

"We must all work together to get the lowest possible council tax and the least damaging cuts. These are tough times."

Some residents say more tax rises would be a heavy financial burden.

Bonita Grummitt, 28, a customer services manager who lives in Wentworth Street, Brighton, said: "I think it is disgusting. This increase is far too high considering how high rents are in Brighton and Hove against the average income for those working in the area."

Joanna Tribe, 31, an account manager of Farm Road, Hove, said: "While I don't mind paying for public services, the council tax rate in Brighton and Hove is already high.

"Being expected to pay this huge increase due to a change in government policy rather than for an improvement in services seems deeply unfair."

Officers stress the 16.5 per cent rise is an estimate and more work needs to be done before a final figure is confirmed. It will include assessing options for savings and considering cuts in services.

Whitehall told the council it would receive a grant increase from central government of 3.6 per cent.

Officers say the settlement fails to keep pace with rising costs of services, with the biggest pressures coming from residential care for elderly people and looked-after children.

Brighton and Hove's budget gap is the difference between how much the council is likely to spend and its income, including the government grant.

The shortfall has to be made up by increasing tax, cutting costs, boosting income from other sources, or a combination of these.

West Sussex County Council, which received the third lowest grant increase of any county council in the country, says it is too early to predict what its precept rise will be, although it expecting to levy a single-figure increase.

East Sussex County Council is also predicting its precept to increase by single figures - but well above the rate of inflation - following its settlement.