Leaders of local government have called on ministers to reform the balance of funding of town halls towards nearly three quarters of their income coming from local taxation.

Under the proposals, the Local Government Association recommends that the council tax be replaced with a fairer property tax, the return of business taxes to local government and a transfer of six or seven pence of national income tax to local government.

"Our alternative passes responsibility and accountability to local people," said LGA chairman Sir Jeremy Beecham.

"We are prepared to take on that duty because we know it will make for healthier local democracy."