City Hall accountants were today examining the fine details of the Government's £485 million spending settlement with the authority.

What they find will not only affect how the authority spends its money next year but will also give a strong indication of any council tax rise.

The local government finance settlement was announced in Parliament immediately after yesterday's pre-Budget report.

The Government says it expects Bradford to spend £622.8 million next financial year and has said it will provide £485.7 million of that - a seven per cent, or £31.5 million, increase on last year.

If the expected spending matches the Council's own figures the authority will have to find just over £137 million from Council tax.

Local government minister Nick Raynsford warned that extra funding and scope for cost-cutting meant there was "no excuse for authorities to set excessive increases in council tax". He told the Commons: "We expect to see substantially lower increases next year, with a national average increase of less than five per cent."

Bradford Council accountants are now breaking down the complex Government pay-out to see if the sum matches that expected by policy-makers - the authority had been expecting less than it said it needed.

It said massive spending reductions would be necessary to avoid a feared council tax rise of almost ten per cent.

Even so, the all-Tory executive had pledged to keep any council tax rise below five per cent no matter what the Government settlement was, even though it reckoned that would mean slashing at least £5.7 million from the budget.

Opposition councillors accused them of "spreading panic" before the full details of the settlement were known.

The executive was so concerned at the issue it asked all political parties for suggestions on where money could be saved next year, and last month issued every Council member with a 70-page spending 'bible', comparing its departments' budgets with those of similar authorities.

The Government has also announced almost £19.5 million next year to give vulnerable people in Bradford the help they need to live independently.