Council taxpayers' money will be used to close the huge hole in Hampshire's local authority pension fund.

A three-yearly valuation by actuaries has revealed a £271m deficit in 2001 has more than tripled to £911m in 2004 due to falling share prices.

Now council taxpayers are set for bigger bills in 2005/06 to stem the losses, but public sector workers won't be asked to cough up extra payments.

Tens of thousands of council workers, teachers, police officers, fire fighters and college lecturers belong to the Hampshire Pension Fund. At present, the employers contribute 12% of an individual's salary, while employees give 6%.

The plan is to hike the employer rate to 15%, to be funded by raising an extra £900,000 in council tax. But protesters say it's not fair that council taxpayers should foot the bill for the funding gap.

Hampshire's £1.9 billion fund can only meet 69% of its liabilities. It will need to grow by nearly a third to pay for its 22,500 pensioners and 60,000 current and former council workers who will want a pension in future.

Employer rates could increase still further to restore the fund to 100% over the next 25 years if the stock market does not pick up.

Hampshire County Council has lobbied to increase the employee contribution to 7%, but the Government has put on hold any increase until after a review.

Mike Schofield, chairman of SHOUT (South Hampshire Opposes Unfair Taxes), said: "It's not fair that council taxpayers should foot the bill. Nobody at SHOUT would want to deny anyone a decent pension, but the way that the current public sevice pension scheme has been arranged is very generous.

"Nobody in the private sector has such a good deal as this. The problem is that the whole system is under such a strain that people are being over-taxed to support it."

The Hampshire Pension Fund includes Hampshire County Council, Southampton and Portsmouth City Councils, 11 district councils, including Winchester, Hampshire Constabulary, Hampshire Fire and Rescue, the University of Portsmouth and Southampton Institute.

A county council spokesman said the fund was not short of cash for paying pensioners. "The deficit is what we would have to pay out now if everyone retired assuming they had worked for us for 40 years.

"In practice, there is more flowing into the fund than we are paying out for the next 10 years at least, even before the latest increase in employer rates."

She added: "The employees' rate cannot be increased to 7% next year as the 6% rate is a statutory rate fixed by the Government. However, the 6% employees' rate is under review as part of the development of a new-look pension scheme which the Government plans to be introduce in April 2008."

The Government is considering raising the retirement age for council workers to 65. Currently, staff retiring early are entitled to a full pension.