MAJOR projects in Abingdon could be in jeopardy if top politicians pursue plans to cap council tax, a councillor has warned.

Chunky expenses such as the Guildhall overhaul might have to be pared back if Abingdon Town Council is forced to consult residents on significant increases, its leader Mike Badcock said.

The Government is considering rolling out referendums to certain town and parish councils next year, if they want to hike precepts by two per cent, or £5 more than the previous year.

Mr Badcock said: "If we get capped it does limit our options. We will not know for sure until the chancellor's Autumn Statement – until then we are in a period of uncertainty.

"In general it wouldn't be a bad thing to be controlled but we have got some major projects and this may affect how we do them. We can't spend money we haven't got."

The proposals are under consultation until the end of October and would apply to local councils with a band D precept exceeding £75.46 this year, and which have a total precept income of at least £500,000.

Referendum rules are already in place for larger authorities including Oxfordshire County Council and Vale of White Horse District Council, but have never before applied to lower tier councils.

Mr Badcock stressed that there were no immediate plans to raise council tax in the town as the council has not yet budgeted for next year, but admitted that the Guildhall project could require an increase, contrary to the council's initial pledge when it announced its £2.1m budget for the building in December.

He said pre-tender estimates for the price of Guildhall were currently being put together.

He added: "I think quite a few people care enough about the town that if it was for something important, they would agree to it, but they would have to be very convinced."

Oxfordshire Association of Local Councils is fighting for parish and town councils in the county and sent an email to clerks and councillors stating: "We will be responding to this consultation in the strongest possible terms, setting out opposition to these proposals as well as calling for the removal of the Secretary of State's powers on council tax referendums."

The expense of running a referendum itself can run into the tens of thousands of pounds.

Abingdon would be among about 120 councils nationwide that would be affected by the plans, alongside seven others in Oxfordshire: Banbury, Bicester, Carterton, Didcot, Kidlington, Thame and Witney.

A spokesperson for the Department for Communities and Local Government said: "The Government is committed to keeping council tax low and maintaining the right of local electorates to approve or veto excessive council tax rises in a local referendum."