Kingston Council has scrapped an almost 4 per cent rise in council tax after lobbying from councils - including Kingston - caused a Government backtrack on funding cuts.

A 3.99 per cent council tax rise, which Kingston Council announced in January, has been reduced to just 1.99 per cent due to extra “transitional” cash being set aside by the Government to help councils badly affected by cuts to the revenue support grants.

The Government announced the grant, which will spread £300m among several councils, in the House of Commons on Monday.

Council leader Kevin Davis said: “This is a significant victory for the borough. We have made our case loudly and clearly to central Government and they have listened and acted.

 “There are still financial challenges for Kingston in the years ahead with a significant revenue gap in the estimates for 2018-19 and beyond.

“We still believe we can best weather those years by being independent from Government grant.

“This is the first time anyone can remember that the local Government settlement has been changed.”

Kingston Council claimed in December it would become “one of London's lowest funded boroughs” as part of the Government’s new support grants, with £20m worth of cuts needed over the next four years.

It was estimated an extra £3.4m would be needed to balance the budget in 2016-17.

A Government-run consultation into the grant settlement received 278 responses from councils across the country, with many concerned that services would be sacrificed under the new scheme.

In a speech to the House of Commons on Monday, local government secretary Greg Clark said: “These are important times for local government. The devolution of power and resources from Whitehall is gathering momentum.

“I am aware that there is serious work for councils to do to provide excellent services to residents – at the lowest cost possible – over the years ahead.”

Kingston Council will continue with its planned social care precept, which will pay for the care of elderly and vulnerable people in the borough and accounts for the 1.99 per cent rise.

With planned reductions to council tax from the Greater London Authority after the Olympics precept ended, residents will pay 0.51 per cent more than last year.

Lord Porter, chairman of the Local Government Association, said: “The LGA has been working hard with the Government on behalf of all councils - both publicly and privately – to highlight the financial challenges they face over the next few years.

We are pleased it has listened to our fundamental call for new money to be found to smooth out funding reductions for some councils in 2016/17 and beyond.”

Opposition leader Cllr Liz Green said: “I’m not surprised that’s what they’ve done, what they need to see is the details behind it.

“They’ve still got to make some very difficult savings and we will just have to wait whether they are achievable or not.”