HUGE tax rises in York could be slightly reduced after an unexpected £1.5 million was found in the council's coffers.

The extra money was discovered following an overestimate in the number of pupils who need to be funded through York's schools.

And more council tax cash has been collected than was expected. Finance officers had aimed for payment from 98 per cent of registered households. In fact, it has been almost 100 per cent.

It means large hikes in the council's tax precept, expected to be 9.5 per cent, look set to be slashed to about eight per cent.

Council leader Rod Hills said today: "It is quite complicated, but it looks like there is actually more money available for a whole range of reasons.

"We should be able to cut the bills by about 1.2 per cent, which is very positive for our tax payers."

But the extra money is not expected to have a major effect on service cuts needed to make up the council's £4 million budget shortfall.

Much of it comes from the tax collection fund, and legally the authority must use any surplus cash in that to reduce council tax bills.

"It is good news though," said Councillor Hills.

"It means the increase will be lower than expected."

The anticipated increase would have seen bills on average Band D city centre homes rise by £75.68 from their current levels of £796.65.

If the eight per cent estimate is accurate, it means the rise will be only £63.73.

Updated: 08:46 Friday, February 15, 2002