Bolton Council taxpayers could be hit with a rise of more than six per cent while suffering cuts in services.

Town Hall bosses delivered the grim news early today after revealing their annual grant from the Government is £1million less than they expected.

The local authority is very disappointed with its allocation of £189.5 million and feels it has lost out to local authorities in the South-east. The total is an increase of £4 million.

Council leader Cllr Bob Howarth said although education and social services will not be affected by the low handout, many other departments would suffer.

He said: "The environment is something which concerns us, of course, but we will have to make cuts and this gives us real problems, I'm afraid to say."

Finance director Steve Arnfield said the grant, which together with council tax provides the council's source of income, was not as good as the local authority had hoped.

He said: "There may be an increase in council tax of six per cent, but this could be higher.

"We will need to wait until early next year to find out what the police and fire need before setting a figure."

Mr Arnfield said local authorities in the South-east had been given higher allocations because the Government felt they were suffering from higher inflation.

He said Bolton Council's opinion was that more money should be put into the overall allocation to deal with that.