Council tax bills could be frozen next year under plans to be included in tomorrow’s emergency Budget, it is understood.

Chancellor George Osborne is expected to unveil the harshest package of spending cuts and tax rises seen for a generation in tomorrow’s “emergency” statement.

He defended the severity of the “tough but fair” measures yesterday – warning the country was on “the road to ruin” without swifter action to tackle the record deficit.

Public sector pay and “out of control” welfare spending are expected to face a serious squeeze as part of a blueprint for the whole Parliament, not just the coming year.

Mr Osborne will deliver some glimmers of good news for voters however – including a pledge to work with local authorities on a council tax freeze in 2011/12.

The Tory manifesto promised a two-year freeze – promising to refund councils which did not put up council tax from savings made on government consultants and advertising.

The coalition agreement between the Conservatives and Liberal Democrats said it would be frozen “for at least one year” with the second becoming an aspiration.