Thousands in Sussex face rocketing council tax bills under plans to bring the system up to date after house prices soared.

Many people would have to pay hundreds of pounds a year more when their homes are revalued as part of an overhaul being considered later this year.

Brighton and Hove and Littlehampton would be among the biggest losers in the shake-up because they have experienced some of the biggest rises in house prices, according to a study using figures taken from the Halifax house price index.

They are among eight towns in the South-East which would face the highest rises in council tax under proposals to move scores of homes up into more expensive council tax bands.

Other hard-hit towns could include Witham in Essex, Whitstable in Kent, Tring, Hatfield and Berkhampsted in Hertfordshire and Teddington in south-west London, all places where house prices have rocketed between 234 per cent and 289 per cent during the last 14 years.

People in an average Band D household in Brighton and Hove pay £1,161 a year but if they were moved up to Band E under the new system their bill could soar to £1,420, a rise of £259 a year.

Critics say the proposed changes, which could be brought in by 2007, would be devastating for hard-working families but the Government says council tax has to be brought into line with the true value of properties.

The last valuation of the real prices of homes was in 1991 but values have soared since then.

A Government spokesman said: "At the moment the council tax is based on 1991 property values and obviously that doesn't really represent the property values for today in 2005. The whole point of the revaluation is to make the system fairer, not to make more money.

"There is a review being done at the end of this year examining the fairest way to change the system. House prices were very different in 1991 and it is fairer to have a system that does not reflect the values from 14 years ago."

Brighton and Hove Finance councillor Simon Burgess said: "Council tax levels are dependent on a range of local factors, not just property values.

"I do not believe any government would reform the council tax system in a way that's entirely dependent on local property values."

Figures by the Halifax reveal homes in four out of five towns in the South would be moved into higher tax bands due to rising house prices.

In Sussex, Brighton and Hove, Littlehampton, Seaford and Chichester would all face a tax hike.

Ministers were accused of trying to keep the proposals quiet until after the general election.

Tony Reid, deputy leader of East Sussex County Council, said: "I think this has to be done as it is a system that is supposed to change every ten years but a massive increase will cause a lot of problems for people.

"The bottom line is that more money needs to be pumped into local government and so they want to raise money.

"But the Government wants to pretend that there is no problem before the election."

Local Government Minister Nick Raynsford reassured home owners by saying: "Only where the change in a property's value is significantly above or below the average is it likely to change bands."

Homes whose value had risen in line with the national average, a 160 per cent increase since 1991, would not move bands.

According to the study by the Liberal Democrats, the formula could trigger huge rises in council tax across the South-East. House prices across Sussex have risen substantially above the average - by 247 per cent in Brighton, 239 per cent in Hove, 257 per cent in Littlehampton, 216 per cent in Seaford and by 214 per cent in Chichester.

Hove MP Ivor Caplin said: "All we have said is that there will be a review into how the bands work and whether they should be altered in any way. It is part of a wider review into council tax. After that houses may or may not need to be revalued."