HOMEOWNERS in Preston and South Ribble could soon be hit by a massive council tax rise.

Lancashire County Council chiefs have been hit by financial trouble after they received less money than expected from the Government for the coming year.

But council officers had already produced estimates on how much they would need to continue existing services and develop new ones over the next 12 months.

As a result, council tax may have to go up to cover the council's extra expenses.

In a bid to ease the problem, Lancashire County Council leader Hazel Harding has asked councillors to review their budgets to keep spending down.

Money from the Government to cover the year from April 2002 is around £6million less than expected, so if councillors fail to find savings the amount of homeowner's council tax handed over to the county could rise by 7.5 per cent, to £855 for a Band D property.

To keep to reduced targets -- which includes cutting £4.4million from the predicted education spending, £4.5million from environment and £500,000 from social services -- the county council portion of the tax will still rise by 5.2 per cent.

Coun Harding said: "I am committed to providing services but we have to try and meet the changed targets.

"I am now telling my cabinet members to go away and look again at their budgets to see where changes can be made. The problem has been caused by the formula the Government uses to allocate cash. It prioritises areas with a growing population, rather than the demand on services."

Councillors will meet at the end of January to announce what savings they have made before the budget is approved in February.