Council officials hope that it will throw off that title when the commission announces council ratings in a matter of weeks.

Last night, Cllr Clucas said: “Over the course of the last eight or nine months, we have made some significant inroads into the underlying problems the council had. We have not allowed officers to run off and spend cash, they have been closely monitored. It has been an austere time.”

Last year, the Lib-Dem authority increased its share of council tax by 4.9% and had said it was hoping to keep increases at 3.9% over the next two years.

Cllr Clucas said that fewer new homes would be built in the city, because of the credit crunch, meaning income would not increase by the level expected and the authority’s gas bill has increased by £800,000.

She hit out at a “laughable” increase of 1.75% in the council’s Government settlement for the coming financial year, and 1.5% the following.

Cllr Anderson said: “The devil will be in the detail. The reason taxpayers are going to be paying 4.45% more for council services is because of the mess the Liberal Democrats have made of the city’s finances over the past five years.”

davidbartlett