TOWN hall chiefs have moved to dismiss claims of a 20 per cent hike in council tax following allegations of a damaging financial crisis sweeping the authority.

It is claimed Chorley Borough Council is in dire financial difficulties with rumours that a council tax increase will help beleaguered services cope.

But at a recent executive committee meeting, council leader Jack Wilson pledged that reductions will be made in council spending in a bid to alleviate the situation.

He also promised to look in to other ways to balance figures so that Chorley taxpayers will be spared a high percentage rise in council tax next April.

Emergency measures discussed at the committee hearing were a recruitment ban and a halt on council expenditure unless approved by the council's chief executive Jeff Davies.

In a report shown to councillors, director of financial services Paul Morris, suggested each council department saves money -- totalling £500,000.

The report also revealed that the council would still be struggling to maintain services even with a 20 per cent increase in council tax.

No increase in council tax would mean the council being in debt by more than £600,000.

Councillor Jack Wilson said: "The 20 per cent figure cited in the officer's report was a projection and not an indication.

"I can guarantee that there will be no more than a single figure increase in Chorley next year."