Threats by the government to cap council taxes have worked, John Prescott has claimed.

The deputy prime minister said on Sunday that local authorities had responded to his warnings to keep council tax rises low.

Both he and local government minister Nick Raynsford had pledged to use their powers to cap councils that set new rates significantly above inflation.

Prescott predicted that the new levies – which are due to start in April – were likely to be in "low single figures".

"It has all come tumbling down. But make no mistake, if you don't get under that line I am going to cap," he told the BBC.

Admitting that the current council tax system had to go, he said ministers were seeking support before making final decisions.

"You have got to find a greater consensus than you have got at the moment. The poll tax taught us that," he said.

Raynsford told Sky News that there would be no repeat of last year’s double-digit rises.

"The levels are coming down very, very significantly. The sort of figures I am seeing are very different to last year," Raynsford said.

"In general the figures are well into single figures. Last year we had an increase of something of the order of 13 per cent which was far, far too high.

"It will be much, much lower this year. We haven't got all the final indications but there is no doubt that levels are coming right down.

"The government has said it wants to see council tax increases in low single figures and we are moving very strongly in that direction."