Taxpayers are likely to pay five per cent more on their council tax bills next year.

The rise would push annual bills for owners of Band D homes to £1,279.

Finance councillor Simon Burgess said: "The administration is determined to meet the Government's target of five per cent."

The expected increase, which has to be agreed by a majority, has been blamed on the disappointing settlement received from central government late last year.

A statement signed by more than half of Brighton and Hove city councillors warned they have been left with no choice but to consider "higher taxes than we would like" and cuts in services.

Members from all political parties have put their names to the motion, due to come before a full council meeting this month.

It reads: "We are again faced with a difficult settlement in Brighton and Hove and are among a quarter of local authorities in England and Wales given the grant floor increase of only two per cent for 2006/07."

Councillors say the rise falls short of the eight per cent increase needed and fear the settlement will place pressure on services such as street cleaning and social care.

The council is also disappointed it has been left to pay for Chancellor Gordon Brown's offer of free bus passes for the elderly. It had expected the £5 million cost to be refunded by central government but because the take-up was so high, taxpayers face having to contribute £1.2 million.

The motion by Coun Burgess has been seconded by his Conservative opponent Brian Oxley and is supported by 30 others from the ranks of Labour, Tories, Greens, Liberal Democrats and independents.

The strength of support means it is guaranteed to find a majority among the 54 members when it is debated on January 19.

Coun Burgess said: "We need fair recognition for the costs of tackling the high alcohol and drug dependency in the city and all the problems it creates. We need to be rewarded, not penalised, for our record in increasing bus usage year on year."

Last month Coun Burgess travelled to London to lobby Jim Fitzpatrick, the minister responsible for setting the grants, to ask him to improve the city's funding package. But privately, councillors are pessimistic about their chances of convincing the Government to review its decision.