Tory MPs yesterday launched a campaign against government proposals for a tax on hotels, hostels and B&Bs.

Shadow ministers Hugo Swire and Eric Pickles manned an ice cream van on the corner of King's Road and East Street in Brighton and presented bemused passers-by with ice lollies and postcards to highlight the threat of what they called a "bed and breakfast tax".

The tax is one of a number of proposals contained in an interim report by a government-commissioned inquiry into local government funding.

If adopted, hotels, hostels and bed and breakfasts could be charged a new local levy on top of existing business rates and VAT on hotel bills.

The report, by Sir Michael Lyons, said: "Taxes on tourist activity have been suggested as a way of raising revenue for authorities and ensuring visitors contribute to the public services they use.

"The most frequent proposal was for a local tax on hotel and similar accommodation ... I am interested in exploring this issue further."

The Tories said the tax could add £100 a week to the cost of a family holiday in Brighton, with the poorest families hit hardest.

It would place a further financial burden on hotels, bed and breakfasts and hostels across Sussex, on top of their business rates.

Mr Swire, shadow culture secretary, said: "The brilliant summer weather has shown what a great place Britain is to spend a short break or a holiday but the great British holiday is under threat from a bed and breakfast tax.

"There is nothing wrong with choosing to travel abroad but no one will benefit from making British holidays a rip-off."

Mr Pickles, the shadow local government minister, said: "Gordon Brown and Deputy Prime Minister John Prescott have already raised council tax bills. Now they want to hike the price of a British break.

"John Prescott travels around the world on foreign jollies at the taxpayers' expense, from casinos in Sydney to scuba-diving in the Maldives and ranches in America.

"He is obsessed with the trappings that come with power and he doesn't give two cents for the struggling British seaside resort."

Adam Bates, tourism chief at Brighton and Hove City Council, said he would have concerns about the prospect of a hotel tax in the city.

Mr Bates said: "The industry has clearly said it would be concerned at any proposals to introduce a bed tax.

"It is possible that any additional tax on visitors could harm our competitive position, which we enjoy at the moment."

The Government said it would not comment on the proposal until after the publication of Sir Michael's final report in December.