THREE of the four groups on Reading Borough Council tonight reached a deal hiking council tax by 3.99%.

A band D property will pay £1,261.05 in council tax, plus £151.27 for the police and £55.11 for the fire service meaning a total bill of £1,467.43.

Labour, the Lib Dems and independent Battle ward councillor Tony Jones reached the deal after frantic negotiations over the weekend to ensure a budget could be set. Top officials at the council had warned them of the consequences if no deal was reached tonight.

A key sticking point in the failed discussions last week was finding spending cuts to pay for a tax increase lower than Labour's original 4.24% and the Lib Dems' spending priorities.

Council leader Jo Lovelock said: "We will ask the council's chief executive to report back on how we are going to find these necessary savings before the end of this month.

"We will be making our political points in different ways on the streets."

The Tories voted against the budget, but did not propose one of their own. They revealed a likely campaign theme ahead of next year's local elections, immediately branding the final deal a �€�Lib-Lab' pact.

Their leader Andrew Cumpsty said: "This has been an extraordinary process - this is a situation that could have and should have resolved long before this evening.

"We've not wavered in our position in calling for a freeze in council tax this year."

He said both he and his deputy, Cllr Tom Steele, had cancelled or altered holiday plans to get to the meeting out of a sense of "civic responsibility".

Lib Dem leader Cllr Gareth Epps said: "This has been delivered in order to seek out something very important, after the very clear warnings about the state of the public finances. There will not be a large sum of money coming like some fairy godmother from Whitehall to rescue the public purse. This proposal sets out a much clearer and more deliverable process to look at making the sorts of savings that the Conservatives should be looking for.

"Their approach was a disgrace, without a single positive idea between them."

The budget - £120,387,000

Budget savings on last year:

Councillors' allowances to be frozen at 2008/9 level to save £12,000.

Refreshments at council meetings cut by £8,000

Chief executive Michael Coughlin to find £356,000 in further savings by March 31.

Chief executive Michael Coughlin to report to the Budget Review Group on further savings (minimum £200,000) above those already identified, on marketing, agency staff, consultants, management, home-to-school transport and other areas with no impact on front-line services.

Budget increases on last year:

Bulky waste charges scrapped for people on housing benefit, costing £55,000.

A �€�Green Hit Squad' to tackle illegal dumping and similar environmental crimes, costing £100,000.

Neighbourhood policing communications programme, costing £50,000.

Extra speed guns costing £10,000.