FEARS that up to 195 fire service jobs would be axed in Worcestershire and Herefordshire have been lifted after the Government eased its budget capping demands.

But the two counties' chief fire officer, David O'Dwyer, warned that the service still faces some "difficult decisions" in making the £1m spending cut, even though it was lower than the £2m expected.

"I was very disappointed with the Government's decision as it puts a high performing, low spending authority in a very difficult position," said Mr O'Dwyer.

"I am pleased that they have listened to our representations and moved significantly by setting a higher capping figure and while this might avoid redundancies, it still leaves the authority with some difficult decisions to make.

"This will inevitably require us to change our plans but we will try to maintain the most important services."

It is expected that the savings will come from cutbacks in areas like station improvements and the service's education and community work.

Nick Raynsford, Local Government Minister, said he was satisfied "there will be no danger to public safety from our decision".

Peter Luff, MP for Mid-Worcestershire, criticised the Government for carrying out its capping threat and forcing the fire authority to foot the £500,000 bill for issuing new council tax bills.

"This is the most ludicrous outcome they could have reached," he said. "What they clearly should have done was accept the fact the fire service is being underfunded by the Government and given them a top-up."

Herefordshire and Worcestershire was the only fire authority to be capped yesterday, along with five councils from around the country.

Herefordshire Council was one of eight bodies - including the West Mercia Police Authority - to have next year's budget restricted.

Herefordshire finance chiefs will have to shave £253,000 off its £175.5m annual spend, equating to around £3.80 a year off a Band D Council Tax bill.

But the local authority has said that the cost of rebilling stands at £1.25 for a Band D property - meaning residents will save around £2.55 a year. Council leader, Roger Phillips, described the decision as "a nonsense".