Council tax in Merton is likely to top £1,000 for the first time.

New Government grant levels for local authorities are likely to mean London bills will rise by about 5.2 per cent for an average band D property.

Mertons council tax rate currently stands at £952 following a 9.84 per cent hike earlier this year.

Steven Byers, minister for transport, local government and the regions, announced on Tuesday that the 5.1 per grant level was to enable councils to deliver on key national and local priorities, while setting reasonable council tax increases.

An additional £41.2million is being made available in the revenue support grant for education and social services.

Wimbledon MP Roger Casale is confident the authority should be able to keep any increase to a minimum.

He said: Merton Council now has the opportunity to demonstrate that it can improve basic services for everyone in the community, such as rubbish collection, street sweeping and work to tackle vandalism, graffiti and abandoned cars.

Bills could rise by a further £60 once London Mayor Ken Livingstone adds his precept for budgets for the Greater London Assembly, police and fire.

Leader of Merton Council, Councillor Andrew Judge, called the grant a tight settlement, and added: In common with many other authorities, we are facing spending pressures in social services and education, particularly upon childrens services, residential care for the elderly and special educational needs.

Despite these pressures and the settlement, we are working hard to balance this years budget and will do our utmost to keep any increase in council tax as low as possible.