Leading members of Bradford Council today welcomed a call for a radical overhaul of Britain's council tax system after local authorities across Britain faced record rises last year.

The Audit Commission - an independent watchdog covering local government and the national health service - concluded there are " fundamental flaws" in the system where most of the funding for local authorities' budgets comes from central Government.

It recommends a reduction in that proportion and urges the Government to be more open about how it calculates its annual grants to councils.

The Audit Commission says if there are differences of opinion between the central and local authorities about the size of the overall local budget, the effect of council tax increases can be "very significant."

And because less than 25 per cent of a Council's income comes from Council Tax, that tax alone has to make up the difference.

Council Tax rose by an average of 12.9 per cent in England last year - with Bradford's increasing by nine per cent - and the Audit Commission says many authorities did not look hard enough for measures to reduce the burden.

Today, Bradford's deputy Council leader, Councillor Simon Cooke welcomed a review but said a main problem was that local government was being used to deliver Government's projects.

"For example, we are taking over the magistrates' courts' licensing from March and are receiving no additional funding from them. I would welcome a review of the system as there are considerable problems."

Councillor Jeanette Sunderland, leader of the Liberal Democrat group, said her party wanted the rights to raise local taxes and take charge of its own borrowing to deliver local services.

Labour group leader, Councillor Ian Greenwood, said an overhaul was needed but he believed the Government had been blamed by the Tories and Liberal Democrats for funding problems of their own making.

The Local Government Association, which represents most of the country's local authorities, said the overhaul was urgent with Council Tax set to rise above inflation for another year.

Chairman Sir Jeremy Beecham said: "The evidence speaks for itself. This report nails on the head any belief that councils have been frivolous, careless or politically-motivated when taking hard decisions on Council Tax and spending on vital services."

Bradford's Council Tax is estimated to rise by at least 6.6 per cent next April.