Labour is being urged to hike council taxes in some areas by up to 410 per cent.

Under controversial plans to completely redraw the 'outdated' system, an influential thinktank wants to scrap the existing bands that determine the size of bills.

The Institute for Fiscal Studies (IFS) claims they should be revised using up-to-date house price estimates and a percentage tax on the home's new value.

Councils in traditional Labour heartlands across the North would be 'winners' if such sweeping changes went ahead. In Kingston upon Hull, average bills would be cut by 60 per cent – saving residents the equivalent of £700 a year.

Yet in parts of London and the South East, average bills would soar 5-fold. Residents in Westminster, for example, would have to fork out £4,645 extra.