Londoners face the lowest council tax increases in the country but typical bills will still rise by almost £35, a survey reveals today.

An analysis of the charges proposed or agreed by Mayor Ken Livingstone and the 33 local authorities predicts that the average demand will rise from £1,258.19 to £1,292.83.

This amounts to a 2.8 per cent increase - at a time when the Government's official measure of inflation is 2.2 per cent.

By comparison, the average increase across England and Wales is 3.9 per cent, while council tax north of the border has been frozen by the Scottish Parliament.

The survey by the Chartered Institute of Public Finance and Accountancy says that the average rise in inner London will be two per cent and in outer London 3.1 per cent.

All boroughs have to add the demand from the Mayor to bills. From April, this will amount to an extra £5.96, meaning a typical London household - those living in a Band D property - will pay £309.82. The bulk of the cash will be redirected by the Mayor to the Metropolitan police.

A number of authorities are to freeze their share of council tax, including Labour-controlled Hackney and Westminster and Wandsworth, which are led by Conservatives. Hammersmith & Fulham (Conservative) is cutting its bills by three per cent for a second year.

The biggest rise was in Lib-Dem controlled Kingston, at 3.92 per cent. An increase of 2.5 per cent is being made in Tory-controlled Kensington and Chelsea, while the rise will be 3.25 per cent in Labour-run Newham and 3.66 per cent in Richmond (Lib-Dem).

Westminster said it saved £20million last year to enable it to remain the second lowest council tax authority after Wandsworth. The band D bill in Westminster-will be £687.62 from April. Wandsworth's bill will be £682. Westminster wants the Mayor's demand to be sent out separately so Londoners are aware exactly how much they have to pay the Greater London Authority.

Westminster deputy leader Colin Barrow said: "Thanks to big efficiency savings, we will be passing on a zero per cent change in council tax to our residents. In contrast, the Mayor has increased his share of council tax for the eighth year running, which at a time of increasing economic uncertainty will undoubtedly hit residents hard.

"It is becoming increasingly questionable whether he is able to offer value for money to local taxpayers."

Wandsworth deputy leader Maurice Heaster said: "Government grant levels are falling behind inflation - it's up to us to bridge the gap by running our services efficiently and making the best use of local taxpayers' money. Leaving our residents with more money in their pockets is part of our vision. For the elderly and others on fixed incomes it's a lifeline."

Cipfa said the low increases were achieved despite councils receiving less money than they wanted from the Government - and being threatened with being "capped" if they sought increases above five per cent. Chief executive Steve Freer said: "Councils will be redoubling their efforts to make efficiency savings to balance tight budgets but where there's still a gap to bridge, there is every likelihood that some service levels will have to be reduced."

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