Scottish Government considers ending council tax freeze

But the SNP administration wants to retain the measure which has been in place for the past three years, he told MSPs during a debate on spending cuts facing Scotland's public sector.

It follows publication of a recent report by an Independent Budget Review Group which warned that up to 50,000 jobs could go in order to meet the planned spending reductions.

The Scottish Government has warned that its annual Budget of about 30 billion is set to fall by an estimated 1.7 billion next year and some councils have already called for the freedom to raise council tax to generate much-needed revenue.

Mr Swinney told MSPs today: "Our preference, as a Government, is to retain the council tax freeze at a time when many households are still feeling the effects of the recession.

"However, we acknowledge there are a range of views and we are consulting accordingly, particularly with our local authority partners."

The recent Budget Review Group report set out a range of options for spending reductions, including looking at the council tax freeze, which has been a key policy of the SNP since coming to power three years ago.

An immediate recruitment freeze across the public sector was suggested as well as suspending the final stage of the abolition of prescription charges, which would see these scrapped completely.

The new coalition Government at Westminster is committed to slashing the UK's 155 billion annual deficit and has announced a range of cuts across the public sector.

Mr Swinney told MSPs that recovery remains fragile and the labour market continues to be challenging.

He added: "The UK Government's plans will see the longest and deepest period of cuts to spending on public services since at least the Second World War.

"That is why we have argued so strongly that the approach being articulated by the Chancellor involves cutting public spending too far, too fast."