WORCESTERSHIRE County Council has been thrown an extra £4.5m which could stave off big council tax increases.

The authority was a big winner from Chancellor Gordon Brown's decision to give local authorities an extra £340m to spend next year.

The extra grant - which can be spent on anything council bosses want - comes on top of the additional £14.3m announced by the Government last month.

The total budget now stands at £286.7m - an overall increase of 7.6 per cent.

The majority of the original rise - which followed years of under-funding - was ring-fenced for the county's cash-strapped schools.

As a result, civic leaders had warned of social services cuts and council tax bills heading for an increase of seven per cent.

But they now have the option of using Mr Brown's Pre-Budget Report money to protect frontline services, or slash bills sent to fed-up householders.

City Labour MP Mike Foster said it was good news for county residents.

"This is a massive increase in resources going to the county," he said. "It completely wipes the floor with the sceptics who were panning both the Government and the new funding formula."

Mr Foster added that the authority now had the option of raising council tax - rather than being forced into it to protect vital services.

"After working on the basis of a 6.5 per cent increase, it may now be that it is four per cent. That is up to the council and it will be accountable for that decision," Mr Foster added.

Mid-Worcestershire Tory MP Peter Luff said it seemed good news although he wanted to see full details.

"It will take off a lot of pressure but that does not mean it closes the gap between us and neighbouring authorities."

Despite being the biggest increase handed to a shire authority, Worcestershire's bonus is swamped by the £12.3m paid to Birmingham.

Worcester City Council received an extra £52,000, but has complained of a budget shortfall of £800,000.

Wychavon District Council, which has a £1m hole in finances received £71,000, Bromsgrove (£125,000), Malvern Hills (£58,000) and Wyre Forest (£19,000).

The councils now face the challenge of keeping council tax bills down after Mr Brown and Deputy Prime Minister John Prescott coupled the additional payment with a stark warning.

Mr Prescott said he would "cap" councils whose increases were "unacceptable".

Mr Prescott and Mr Brown want increases to be "low single figures".