A DECISION not to pay off a council loan early will cost taxpayers thousands of pounds, it has been claimed.

The £8,500 loan, taken out by Stourport Town Council in 1980 for a period of 60 years, costs £1,232 a year in repayments.

Town councillor Mick Grinnall said the treasurer's figures show the move will cost the town more than £25,000 over the next 38 years.

Mr Grinnall added council tax rates were increased two years ago to pay off the loan to pay for an extension to the cemetery next to the town's St Michael's Church.

He said: "I think the council should carry out what they said they would do. I don't think councillors really understand the full implications."

But the council has approved a finance committee recommendation not to pay off the loan early at an immediate cost of more than £20,000 because it would prevent the council "pursuing any other significant improvement in amenities".

In 2000 the council tax precept was increased by about 2p a week - but the vice-chairman of the finance committee Carol Warren denied it was specifically to pay off the cemetery loan.

She said the raised precept was to cover increased costs of running the council and providing services - and there had been a "desire" but "no firm commitment" to pay it off.

Mrs Warren added the issue would again be up for discussion before this year's budget.