Council tax payers in Eastbourne will be hit with a 38 per cent increase in their bills, one of the biggest in the country.

Councillors last night approved the rise - which means Band D homes in the resort will pay more than £1,200 next year - as well as increases in council-run services.

Liberal Democrat-run Eastbourne Borough Council said bills could have jumped by 65 per cent.

It said a disastrous Government grant settlement for East Sussex, which saw a 3.8 per cent rise in funding, has forced such high increases.

A new seven-year refuse contract awarded to French-owned Sita, costing more than £1.6 million next year, also cut deep.

Councillors asked residents to direct their anger at the Government, which defied cross-party pressure to allocate a low grant. Ministers are taking money away from the South to give more to local authorities in the North.

At last night's council meeting the Lib Dems said Eastbourne will still have the second-lowest council tax in East Sussex.

Council leader Beryl Healy said: "It's going to be hard for council tax payers in Eastbourne but we can blame the Government for that. We did join in lobbying the Government for a better settlement but they didn't listen. Now this is the result."

Opposition Conservatives predicted numbers of council and housing tax benefit claimants would rise sharply as residents struggle with their bills.

Conservative leader Graham Marsden said: "This budget delivers little to satisfy residents and much pain. In producing a budget it is essential the council cuts its coat according to the cloth available."

To add to residents' woes, councillors also sanctioned a package of increases in fees and charges totalling almost £350,000.

Rises will be felt at the Sovereign Centre, off-street parking in Hyde Gardens and the Beachy Head car park and in 32 per cent rises for Holywell chalet rents.

Conservatives said the increases could deter visitors.

Coun Marsden said: "I am sure hoteliers and traders will have some hard questions for members of the controlling group who appear anti-business and anti-tourism."

Eastbourne Conservative MP Nigel Waterson came in for criticism for failing to lobby the Government on the poor grant settlement.

Bills for 2003-4 will be Band A £806.33, Band B £940.72, Band C £1.075.10, Band D £1,209.49, Band E £1,478.26 Band F £1,747.04, Band G £2,015.82 and Band H £2,418.98.

The borough council's share of the overall council tax bill has risen by 35 per cent but it means an overall rise of 38 per cent when added to East Sussex County Council and Sussex Police Authority's contributions.