Hammersmith and Fulham, Kensington and Chelsea and Wandsworth are understood to be amongst six local authorities who will be allowed to increase council tax next year by more than the current limit without a referendum.

A rise higher than five-percent usually needs voters’ approval.

The affected councils, in some of England’s wealthiest areas, are expected to lose out when government funding is reviewed.

The Tories claim low-tax councils are being punished.