The Conservatives have detailed their plan to cut council tax bills for the elderly.

Party leader Michael Howard promised to take action to help pensioners with their payments.

The move came as figures for this year's council tax rises are finalised, with Labour boasting that tax hikes in its councils are lower than those in Tory-controlled town halls.

But Howard blames Tony Blair's government for putting pressure on local authorities, by failing to give them sufficient funds for the services they are expected to provide and forcing them to increase "stealth taxes".

In his party's first solid tax cut commitment he promised to fund the move by cutting local government bureaucracy and using £1.3 billion of £4 billion set aside for Tory tax cuts for the "priority".

Around five million pensioners would benefit of a tax cut capped at £500 under the scheme which Howard insisted would not be subject to the "evil" of means testing.

With pensioners becoming increasingly large in number and more likely to turnout than younger people, all major parties are targeting the "grey vote" in the run-up to the general election.

"I believe that people deserve to be treated with dignity and respect in their old age," Howard said.

"So I will increase the value of the state pension in line with earnings, making pensioners up to £11 a week better off.

"Those who have given so much so should surely receive their due.

"I will help pensioners with council tax bills. The council tax has been Mr Blair's most punishing stealth tax and it has hit people on fixed incomes particularly hard."

Dispute

However deputy prime minister John Prescott said "council tax increases this year are set to be the lowest in a decade".

"The latest figures that we are releasing predict an average increase of 4.4 per cent. Band D figures show that Labour councils are coming in at 4.2 per cent, compared to Tory authorities increasing by 5.5 per cent on average," he said.

"The Tories should be concentrating on ensuring their own councillors keep council tax bills down. Like last year, Tory authorities are setting higher average council tax increases than Labour ones.

"Look at the difference between Labour run Doncaster, who are proposing a zero per cent increase, and Tory led South Cambridgeshire, who are reportedly looking to increase council tax by 100 per cent.

"But we do recognise that pensioners deserve extra help. That is why this year we are helping pensioner households over 70 with £100 extra, and we are committed to giving them a further £50 to help with next year's council tax bills.

"The Tories sums do not add up and they have not even said how they will pay for this uncosted proposal."

Income

Howard insists that "all my plans have been fully costed and are fully funded so that Britain's economy will be secure for the next generation".

But Liberal Democrat spokesman Edward Davey said his plans were also "insufficient, unfair and shortsighted".

"Michael Howard has finally realised that the tax that he and his party introduced is an unfair burden. But he wouldn't scrap it," he said.

"The Liberal Democrat proposals to scrap council tax will save the average pensioner far more than the Tory plans, with more than half of pensioners would paying no local income tax at all.

"The Tories have once again failed to target the most vulnerable. After revaluation, many pensioners would still struggle to pay, even with the Tory discount.

"Pensioners should be wary that this is a promise based on uncosted figures and a cheque from the Conservatives is going to bounce.

"Scrapping council tax is the only way to make local tax fair and get the most help to vulnerable pensioners."