Dorset Council has approved a five per cent council tax rise.

It means residents will continue to pay one of the highest rates in the country, with most 'average' homes having to stump up more than £2,000 a year.

During the Tuesday evening debate, councillors on all sides complained that the county continues to be treated unfairly by the Government's funding formula.

Littlemoor and Preston councillor Louie O'Leary was the only majority party member to hit out at the rise, claiming to be speaking on behalf of the silent majority. He said that although he would support the increase it was about time the council declared a tax emergency – mindful that many will struggle to pay the new charges.

He said that the council collected the second highest council tax in the country and needed to tackle the problem.

"If things don't change people will leave, as some young people already are…we need to see this as a priority," he said.

Lib Dem leader Nick Ireland said despite the county having Tory MPs and the council being Conservative controlled it was still unlikely there would be any change in the way local councils like Dorset are funded.

He also warned there would be many who could not afford the increase: "It will impact greatly on many who can ill-afford it…it will be a burden which will not be welcome," he said.

The Owermoigne councillor said that the current year was likely to end with an £18million shortfall – money which would have to be taken from dwindling reserves, despite the council tax increase.

Council leader Spencer Flower described the budget as 'most challenging' but said that cuts to key services had been avoided. He pledged to continue lobbying for changes in local government finance.

He said that that while Dorset gets 85 per cent of its income from council tax, other unitary councils only need to raise 67 per cent, and while Dorset gets 14 per cent via non-domestic income others receive 28 per cent. He said there were some councils still receiving four per cent rate support grant from the Government, while Dorset gets nothing.

"There is some imbalance here which I take very seriously…there is unfairness in the way the shires are funded – we need a better deal for Dorset and I will continue to lobby for that," he said.