A new tax on hotels and guesthouses could be disastrous for the tourist tradeon the South Coast, councillors have warned.

Brighton and Hove City Council's Conservative group said the city's economy could be seriously damaged if the Government goes ahead with plans to introduce a "bed" tax, mooted in a report in December.

Group spokesman Brian Oxley said: "With UK tourism in danger of stagnating and hoteliers struggling to absorb increased energy costs, an extra tax is the last thing they need."

He said the tax would result in higher prices at hotels, guesthouses and bed and breakfast accommodation and would lead to tourists choosing a holiday abroad.

He said the potential knockon effect for Brighton's economy would be hard to bear.

The group has prepared a motion, which will be put before the council on October 19, calling for it to voice its concerns to the Government and Tourism Minister Shaun Woodward.

Part of the motion states: "This Council notes that barowners, club-owners, tourist attraction managers and shopkeepers are concerned that the negative impacts of the tax could have a spillover effect in to their businesses."

Mr Oxley said: "Such a tax, if introduced, would be of particular concern to our city as so much of its income is derived from tourism."

Conservative finance spokeswoman Ann Norman added: "Millions of UK residents already feel that it is cheaper to holiday abroad than to holiday here. Does Government really think these residents will be more inclined to holiday here if it increases the cost of British holidays even more?"