Its policy and resources committee had recommended a 3 per cent hike, but in a surprise move at a special budget meeting on Monday council and Conservative group leader Keith Knaggs said savings had been found which would reduce the rise to 2.5 per cent.

That makes the call on council taxpayers in an average band D home £176.72 a year from April for services provided by the district council.

When North Yorkshire County Council, the Fire and Rescue Service and the North Yorkshire Police charges are added the bill for a band D home in Ryedale will be £1,280.59 before any parish expenses are included.

Cllr Knaggs told the council that it had become apparent at the policy committee that members wanted to reduce Ryedale's share of the charge to an increase below 3 per cent but could not specify how it could be achieved.

He had since found three areas where savings could be made – a freeze on councillors' allowances, a reduction in subscriptions to the Local Government Association and Regional Assembly and using flexibility in filling a vacant post. That would cut spending next year by about £18,000 to achieve a 2.5 per cent increase in the council tax.

It was LibDem Cllr Lindsay Burr who had pressed the policy committee to make the increase 2.5 per cent and she said she had also since found areas where savings could be made.

Seconding Cllr Knaggs' proposal she said: "This will be lowest council tax rise in North Yorkshire, which I think is a creditable thing to do."

Independent Cllr Tony Hemesley also back- ed the move, saying: "Members of the public will see we can get a consensus if we try."

Lib Dem Group leader Cllr Howard Keal said the low level of district council tax sent out a "symbolic message" that the authority was doing all it could to help taxpayers but, he said, Ryedale's share of the tax was small – 12 per cent – compared with the county council's lion's share.

It had imposed a 3.94 per cent increase in the rate making the charge for county council services for a band D home £1,027.30 a year from April.

But Independent Cllr Paul Andrews said he would vote against any increase, whatever it was, because of the council's "shameful" failure to help businesses in Malton by reducing car parking charges and because the council had introduced a costly new tier of officers.

Liberal Cllr John Clark proposed a string of amendments to the budget which he said were aimed at reducing the council tax and identifying funds to employ an environment officer – a post he said had been deleted from the council's staff establishment.

He put three motions forward – to delete the civic hospitality budget, achieve energy efficiency savings on heating Ryedale House and scrap the £30,000 cost of CCTV cameras in Ryedale towns.