Shadow cabinet member for resources coun Philip Broadbank (Lib Dem, Starbeck) said the council tax bill could be reduced by at least 2.5 per cent with better financial predictions, and he said the Liberal Democrat party will be pressing the council to take a harder line with departmental budgets next year.

But Cabinet member for resources Coun Andrew Jones (Cons, High Harrogate) dismissed the claims as nonsense, saying the council has an excellent track record of keeping tight pursestrings.

Coun Broadbank said: "For several years the council has seen an underspend on its predicted budget of around £1m.

"Although there is no question that this surplus is used properly in the succeeding year it does point to systemic over-budgeting. There is no doubt that with rising costs and falling incomes the council has to play its part in the general belt tightening."

Last financial year the council reported an underspend of £1.3m - money it thought it would spend but did not. This money, equal to 1.4 per cent of the council's budget, was used on things such as recycling initiatives and environmental schemes.

Coun Andrew Jones criticised Coun Broadbank's remarks, and he pointed to this year's council tax rise of 4.2 per cent which was the lowest year-on-year increase in a decade.

He said: "The budgeting process is exactly the same as when the Liberal Democrats were in control. But they failed to face up to the long-term challenges and they left the council in a financial mess.

"We have increased demands and costs and we are seeing inflation at more than four per cent. Yet our Government grant is increasing by only 1.7 per cent. This comment shows just how far off the Liberal Democrats are from understanding the challenges facing the council.

"The Liberal Democrats will not raid the council's resources for a political stunt."