Crackdown on councils' 'fat cat' bosses

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Mr Healey added that councils had "no excuse" for imposing large council tax rises and he expected many bills to be frozen without services being cut.

The minister, who was visiting three London boroughs - Hackney, Newham and Greenwich -with zero tax rises today, announced he was giving an extra £131million to the capital in the first tranche of a three-year funding settlement.

He said the public would expect authorities to "tighten their belts, keep council tax down and provide top-notch services".

The Government will force chief executives to reveal exactly how much they are paid. At present they can hide behind a pay "band".

Mr Healey attacked council chiefs over an "unacceptable" spiral in their salaries.

Councils should be shamed into setting appropriate remuneration packages rather than having limits imposed by central government, he said.

In the 2006-07 financial year, 818 council staff were paid more than £100,000, compared with 645 in the previous year, according to the Taxpayers' Alliance.

They included Joe Duckworth, chief executive of Newham, on £240,000.

Council taxes are expected to rise by 3.5 per cent nationwide in the coming financial year, but in London the average is expected to be lower.

Mr Healey said: "Only by becoming more efficient can councils maintain services and keep tax low."