The government has confirmed it will give more than £126 million to Swindon Council this year to fund services making a big council tax rise or swingeing cutbacks inevitable.

Council chiefs had hoped to squeeze more cash out of officials, on top of the money which was allocated to Swindon in December.

But local government minister Nick Raynsford confirmed the final settlement figures yesterday and there is no extra money.

The multi-million pound grant represents a 5.2 per cent increase over the previous year's level, and includes a £1.2 million bailout designed to help avert a council tax meltdown.

Mr Raynsford said this cash was enough to ensure services were improved without local taxpayers suffering, if the council was well run.

Repeating his stance that there was no excuse for huge tax hikes this year, he warned council chiefs he would step in and block them if necessary.

He said: "Given this significant extra investment and the scope for efficiency improvements, our view is that local authorities can and should deliver council tax increases next year in low single figures.

"I hope we do not have to cap authorities. But, make no mistake, we are prepared to use our capping powers on any authority if that proves necessary."

Town MPs Michael Wills and Julia Drown have backed this line and called on the local authority to stop complaining and start delivering.