Council tax will rise by 1.99% in Brighton and Hove after the Green Party and Labour finally reached a compromise.
After last week's deadlock there was added pressure on the three parties - Greens, Labour and the Conservatives - to reach an agreement last night.
Before the evening meeting an official note was sent to members reminding them of their legal duty to pass a budget and set out the consequences if they failed to do so.
They included secretary of state for communities and local government Eric Pickles making the final decision and local members being held individually responsible for a budget not being set.
For the second time in a matter of days Green Party hopes of a public referendum on a 4.75% council tax increase were dashed.
During a 30 minute debate each leader was given one more chance to push for their party's preferred position, with Labour looking for a 1.99% increase and the Conservatives vying for a freeze.
Council leader Jason Kitcat said his party went to the meeting with a heavy heart and accused the Tory contingent of trying to push the council's finances off a cliff and in to the hands of Eric Pickles.
In a passionate reply Conservative leader Geoffrey Theobald reiterated his party's commitment to freezing council tax.
Labour leader Warren Morgan said the advice from the council officers was for a 1.99% rise and members had a responsibility to respect their professional opinion.
Speaking after the vote, which saw Labour and the majority of the Green party vote through a 1.99% rise, Coun Morgan said the right decision had been made.
“It's a victory for common sense,” he said. “The consequences of us not setting the budget tonight would have been extremely serious for local services and council jobs. I'm pleased we've saved £900,000 on the referendum and £800,000 of cuts.
“We've got a sensible rate of inflation increase and we can now get on with the job of running the council.”
Prior to the vote a joint amendment was passed unanimously by all three parties, agreeing the use of one off reserves to contribute funds to social enterprise Able and Willing which supports disabled people, the Pride festival and for employment support within adult social care.
After all Conservative members stuck to their position and voted against the budget, Coun Theobald said: “I think it's disappointing for the residents of Brighton and Hove.
“All this has done is create £850,000 and put everyone's council tax up.”
But it is the Green Party, and its embattled leader Jason Kitcat who, despite reaching an eventual compromise will be under most scrutiny having seen their 4.75% increase defeated twice.
Coun Kitcat denied the decision put him and his party in a weak position and added: “We came with heavy hearts to this but I think our position has been clear.
“It was important that the council budget was set. It is important local councillors retain the final say on this.
“I'm pleased there was cross party agreement on a series of areas which will help keep services going in the year ahead. Everybody had to compromise.
“It wasn't the budget we hoped for but at least the city has certainty and the Secretary of State will not be involved.”
How they voted: