NORTH Dorset District Council has opted for a shock council tax freeze after a Government “threat”.

The cabinet had planned a rise just below the 3.5 per cent maximum allowed before a compulsory referendum.

However housing minister Grant Shapps told Parliament the government would seek to punish councils putting up council tax in any way.

Possible measures include adjusting the baseline figures for different business rates.

Council Leader Peter Webb told the Echo that in the light of what was “effectively a threat” the council had gone for a freeze instead.

The freeze triggers a special bonus grant that in North Dorset’s case is worth £71,000, or the equivalent of a 2.5 per cent tax increase.

Cllr Webb said councillors decided residents would prefer that out of the two options.

But he said: “This will give us problems in the future.

“We get only get 60 per cent of what the average district council gets.

“It’s been at that level for many years since Labour capped it in 2005.

“That’s far too little money to be able to satisfy 100 per cent of the requirements that the government places on district councils.”