Ministers have decided not to require York and Medway councils to reset their budgets and force them to rebill after nominating them for capping.
But local government minister Phil Woolas said that next year the authorities' budget rises would be measured against new notional budgets that were £0.7M less in total than the actual ones 'to protect council taxpayers next year'. He warned all councils that rises of five per cent or more would not be acceptable for 2007/08 either.
Both authorities challenged the maximum budgets imposed in March. Medway council said in a statement that 'common sense has prevailed'.
Click here for more.