CITY OF YORK Council looks set to escape "capping" action by Deputy Prime Minister John Prescott.

Mr Prescott is also expected to spare North Yorkshire Police - though both authorities ignored his demand for "low single" figure council tax increases.

Council leaders in York agreed an increase of 8.5 per cent after initially threatening a 9.3 per cent hike.

The police authority raised its share of the bill by 9.94 per cent, creating an overall budget of £122 million.

Mr Prescott is due to make a statement to Parliament on which authorities will be capped later this week.

His office refused to name the councils, police and fire authorities which will have their budgets cut today.

But, according to speculation at Westminster, he will only act against Herefordshire, Notting-ham, Telford and Wrekin, Torbay, Fenland and Shepway Councils.

He is also expected to act against the Cumbria, Northamptonshire and West Mercia Police Authorities.

Updated: 11:18 Monday, April 26, 2004