COUNCILS in Wales were urged to keep a lid on council tax rises when they got a 2.1% funding increase from the Assembly Government today.

Local Government Minister Brian Gibbons hailed an "above-inflation’’ revenue settlement of more than £4 billion which was intended to protect key public services.

He called for a truce with council leaders after years of rowing over local authority funding.

His department is working on a new system of agreements to cut red tape and set out what councils are expected to deliver.

"This time of the year is not productively spent firing shells over the no man's land that we have done year after year,’’ Dr Gibbons said.

Asked about tax rises - ministers have threatened to cap hikes at 5% in recent years - he said: "The economic situation is such that no council is going to engage in maverick activity.

"We have set the benchmark in previous years at middle single figures, let's say, without being too prescriptive.

"The use of capping powers or anything like that are very much a last resort.’’