TAXPAYERS in Lancashire have been warned to brace themselves for a inflation-busting 6.2 per cent council tax rise next year.

And that rise could be even higher if a review of how cash is dished out to councils leads, as expected, to Lancashire County Council receiving less money in future.

Officials at County Hall have spent the last month analysing the Government's summer spending review, which outlined the headline figures in terms of support authority's can expect from Whitehall over the next three years.

Chancellor Gordon Brown's plans will involve an average 4.2 per cent increase each year for three years in real terms -- once an inflation level set by the government of 2.5 per cent is taken into account.

But council bosses are bracing themselves for another inflation-busting pay demand from council workers.

And those figures are subject to change later on this year when the Government announces its new formulae for dishing out cash to councils.

It had been hoped the review would lead to more money coming into the North.

A series of options have been put on the table, the best of which would benefit the county council to the tune of £15million a year, and the worst of which would hit them for £25million.

Until a final decision is announced, in November, council officers can only work off the headline announcements made by Mr Brown earlier in the year.

A report to the cabinet stated: "Although the outcome for the county council as a result of the new formulae is unlikely to be at either of the extreme ends, the fact that the potential negative effects are almost double the positive figure suggests a probable overall outcome of net loss of resources for the county council."

This year's council tax rise was 7.7 per cent, partly brought on by the refusal of several cabinet members to trim their budgets back to meet targets set by finance chiefs at the county council.

A fresh report will go to the cabinet on December 5, once the implications of the new formulae are known, detailing what extra spending or savings need to be made.

Inflation currently stands at less than two per cent.