A "DOUBLE whammy" by Whitehall looks set to bring a large increase in council tax to North Yorkshire.

The county council is on a small list of local authorities to be punished twice by new funding rules.

It will not receive the Area Cost Adjustment - which gives a bonus payment for areas with a high cost of living - and also gets money taken away under "resource equalisation".

Resource equalisation diverts money from wealthier areas, considered to have a "healthy council tax base", and gives it to poorer areas.

Only 30 councils across the country are in this position.

As a result, North Yorkshire County councillors, preparing a budget for next year, will have to consider large increases in council taxes or cuts in services.

City of York Council is also on the list, which the office of the deputy prime minister was forced to publish in a written parliamentary answer.

Cash grants paid by the Government to provide services next year are expected to be poorer than those handed to disadvantaged areas in Labour heartlands or parts of the country considered to have high living costs when they are unveiled today.

County council leader John Weighell said: "We had been led to believe last year was the end of resource equalisation. Certainly we hope it won't happen this year."

Last year, North Yorkshire County Council imposed an 11.5pc council tax hike after its Government grant increased by only 5.2pc, or £15.2m, when the "double whammy" hit for the first time.

Experts are warning the increase could again be 12pc - or higher.

Vale of York MP Anne McIntosh, who is due to meet with North Yorkshire County County Council, said officials were braced for bad news.

The Tory MP said: "It looks like they will be raiding our coffers to subsidise profligate councils in places such as Sheffield and Hull, John Prescott's local council.

"The settlement North Yorkshire got last year did not even cover the increases in employer National Insurance payments for teachers and other staff."

The Local Government Association is predicting average increases of 12pc - more than £100 for an average Band D home.

Updated: 11:58 Wednesday, November 19, 2003