Colchester Council is still in the dark about the impact Government spending curbs will have on its budgets.

Tory Communities Secretary Eric Pickles has announced Whitehall grant cuts to councils next year will average 4.4 per cent – but warned some could lose as much as 8.9 per cent.

Mr Pickles has yet to reveal how hard each individual council will be hit, or how he expects savings to be made.

If Colchester Council were to suffer an above-average cut, it could have to cut as much as £500,000 from budgets from which £600,000 has already been stripped.

Paul Smith, councillor responsible for resources, said: “There are as many questions as there are answers. What is the 8.9 per cent based on?

“Is it based on our total income, or is it just our revenue support grant from the Government?

“Clearly, this is a tough settlement for tough times, but it is difficult to say more than that until we know the full story.”

The council had been waiting on the funding announcement before making final decisions on further cuts to its budgets for the next financial year.

It had already planned cuts, based on losing £600,000 in grants – roughly in line with the 4.4 per cent average figure announced by Mr Pickles.

However, if the borough were were to lose 8.9 per cent of its grant, it might have to cut services or sack staff to balance the books.