Hampshire has challenged local government minister, Nick Raynsford, over his comments on proposals to reduce funding for authorities in the South-East.

He was speaking at a seminar for MPs on the new funding formula when he said: "No authority will get less grant, on a like-for-like basis, next year."

County council leader, Ken Thornber, is heading the campaign, "Hands Off Hampshire".

He says the proposals could cost Hampshire £80m in lost grant and he has written to the minister, spelling out the implications for council-tax payers and service users and demanding a personal reply.

He is urging ministers to reconsider the proposals to avoid swingeing rises in council tax to protect services such as education and social services.

Said Mr Thornber: "We've heard all this before and it's little comfort. Hampshire County Council faces a potential loss of nearly 10% of our total budget and the equivalent of 900 teachers, or two teachers per school and comparable numbers of social workers and engineers.

"We can't cut services to that extent."

He warned the minister that council tax would increase enormously in Hampshire if the Government went ahead with the proposed changes.

Mr Thornber denied that councils in the South-East were "scaremongering" and he explained that the cost of meeting the extra spending the Government wanted for education and social services alone would cost £40m.

"So, by saying that there would be a cash freeze, the minister is saying Hampshire will be £40m short. He is also saying that he will not be funding next year's weighting award or our price inflation, both of which amount to a further £30m."

He said the phasing mechanism in future years provided no comfort, either.

"We would still eventually lose any grant changes - but over a period of years", he said.

"The Government must keep its hands off Hampshire and I have asked the minister to reconsider the disastrous impact these changes will have on services and the pockets of council taxpayers in Hampshire.

"Our electors will be very clear why council tax will have to go up if these changes go ahead, despite the Government claim that no authority will get less grant."

New Forest East MP, Julian Lewis, who challenged the minister at last week's seminar said: "Mr Raynsford flatly denied that it was the Government's intention to use the new funding formula to redistribute grant from one part of the country to another.

"However, all the signs are that this is precisely what is going to happen to the South-East in general and Hampshire in particular."

Romsey MP, Sandra Gidley, added: "The minister is pulling the wool over our eyes when he states we won't be worse off.

"He is not making allowance for inflation, or guarantees for long-term funding. The Government's plans to deprive Hampshire of money are perverse, seemingly making promises with one hand and withdrawing the money to fund those promises with the other.

"The elderly will be first to suffer at home or in nursing homes. The Government will no longer be able to get away with trying to pass the buck to local government for problems caused by future withdrawal of funding."

Hampshire MPs were due to debate local-government finance formula grant distribution in the Commons last night (Thursday).