The Labour group on Oxfordshire County Council is demanding no more than a four per cent increase on this year's council tax bills.

It has carried out its own budget calculations following additional Government funding from Chancellor Gordon Brown of an extra £4.4m designed to offset large increases.

Group leader Liz Brighouse said: "We have now shown that we can cost a budget at a four per cent increase, which protects all existing services, provides an extra £4.3m for schools, and still leaves another £7.9m to pay for essential new works.

"If we can do it, so should the executive."

The council is run by a Conservative-Liberal Democrat administration.

During the current year residents faced an increase in their bills of 13.4 per cent. Before the extra funding was announced, the rise from April was expected to be between 7.3 and nine per cent.

Council leader Keith Mitchell would not be drawn on what the precise increase would be.

He said: "Members of the public on a panel are being consulted on a variety of options next week, so it would be wrong to comment before then.

"Details of the teachers' pay settlement and the white collar workers' settlement have not come through and the Government still has to confirm the precise figures for the council's grant allocation.

"Labour are jumping the gun to grab a headline but we still need to analyse the figures.

"Our aim is to keep bills as low as possible, in line with service needs."

Deputy Prime Minister John Prescott said he would be looking hard at the budget of any council which set a council tax increase above a "low single figure".

Most district councils are planning to scrap the council tax discount for second home owners, which could help reduce council tax bills.