THOUSANDS of residents in Bolton could benefit from a plan to create a new lower council tax band aimed at the poorest families in the North-west.

The proposal, part of a series of measures drawn-up by ministers hoping to end resentment at soaring bills, has been welcomed by opposition councillors and the Royal British Legion.

According to reports, new regional bands to reflect local property values are to be introduced meaning many people living in the borough's smaller homes would see their bills cut.

The plans, which could come into force as early as 2007, would wipe out the current eight bands and allow higher rates to be imposed on owners of expensive homes in wealthy regions such as London and the South-east.

Ministers are also reported to be examining more radical options such as local income tax.

Final details will be announced in June by the Office of the Deputy Prime Minister as it prepares for a full re-evaluation of bands in four years.

Brian McCartin, of the Royal British Legion, which has helped organise a march in London on Saturday against rising council tax, believes the moves would help local pensioners.

He said: "Many elderly people are struggling to pay the current rate and anything that eases the burden has to be welcomed.

"There is a lot of resentment among Bolton's pensioners over the high amounts they are currently asked to pay."

Cllr Alan Rushton, leader of the Conservative group on Bolton Council, said: "All parties are concerned about the way council tax is organised because every time the Government gives a settlement, it is not enough to cover the things it has told the council to do."

The proposals come as Liberal Democrats gave details of their plans for a local income tax - to replace the council tax - to be taken out of residents' wages.

According to the party, seven out of 10 people would pay less than they currently do in council tax under the scheme.

Cllr David Wilkinson, of the Liberal Democrats, said regional rebranding would not go far enough.

He said: "Poverty and disadvantage are not unique to the north and neither is wealth to the south.

"We need a new system which is fair to every payer."

But Cllr Bob Howarth, Labour leader of the council, claimed the Liberal Democrats' plan would hit people in the pocket as every working member of the household would be made to pay.