Lewes residents could face a 17 per cent tax rise or drastic cuts in services after a council discovered it was to receive only a quarter of the cash it was promised.

Lewes District Council has become involved in a political row with local government minister Stephen Byers, who has been accused of a blunder which councillors believe has left them £153,000 short.

Other councils have since questioned their grants after Lewes announced it had been short-changed.

Councils set to get less money than published in the official figures are Arun, Mid Sussex, Adur and Chichester.

Horsham, in line for a grant increase of 4.8 per cent according to Government figures, understands it will receive just 1.7 per cent extra.

Lewes MP Norman Baker called on Mr Byers to make an urgent statement to the House of Commons, clarifying the position of Lewes District Council and other local authorities confused about the grant they are to receive next year.

Mr Baker said: "Either this is a blunder, another example of incompetence in the way Stephen Byers and his department produce their figures or it's a deliberate attempt to spin and mislead people.

"Lewes has always done very badly with government grants so it needs a settlement at least in line with inflation.

"There is now a need for Stephen Byers to issue a statement to clarify the position."

The Government announced its financial settlement to local authorities last week, revealing what each council would receive from central government next year.

Lewes District Council had been told it was to receive just 0.8 per cent more than last year's figure, about £40,000 extra.

But provisional figures released by the Department of Transport, Local Government and the Regions (DTLR) on Tuesday stated the council was in line for a 3.1 per cent increase - an extra £153,000.

Council leader Ann DeVecchi said: "The figures published do not tally with what we understand we are going to receive. There appears to have been a misunderstanding.

"Our treasurer has since had a meeting in London and has established we are not the only council in this situation. We are waiting for an explanation."

The DTLR said it was aware of the apparent discrepancies and was investigating.