January 13, 2008 12:00 AM

The Liberal Democrats have pledged to keep Newcastle's Council Tax rise below inflation despite facing cuts from the penny pinching Labour Government next year.

Newcastle gets a 2% general grant rise next year - the lowest increase possible. This is worth £3.2 million, but the Lib Dem-run city council faces losing £3.6 million in other grants.

Work is underway to develop detailed budget proposals for 2008/9 and the Lib Dem Council will look to make efficiency savings to balance the books.

Lib Dem leader John Shipley said: "We are working out how we can continue to deliver ever better services for local people with less money and with more demands.

"We will consult with the public on the details in January. However, I can confirm now that we will not increase council tax above inflation."